FEEM working papers "Note di lavoro" series
2010 .009

Do Competition and Ownership Matter? Evidence from Local Public Transport in Europe


Authors: Andrea Boitani, Marcella Nicolini, Carlo Scarpa
Series: Economy and Society
Editor: Fausto Panunzi
Type: Journal
Keywords: Local Public Transport, Public Ownership, Translog Production Function
JEL n.: C33, K23, L25, L33, L91
JEL: Applied Economics Vol. 45, N. 11
Pages: pp. 1419-1434
Date: 2013

Abstract

This paper investigates how the ownership and the procedure for the selection of firms operating in the local public transport sector affect their productivity. In order to compare different institutional regimes, we carry out a comparative analysis of 72 companies operating in large European cities. This allows us to consider firms selected either through competitive tendering or negotiated procedures. The analysis of the data on 77 European firms over the period 1997-2006 indicates that firms operate under constant returns to scale. Retrieving the residuals we obtain a measure of total factor productivity, which we regress on firm and city characteristics. We find that when firms are totally or partially in public hands their productivity is lower. Moreover, firms selected through competitive tendering display higher total factor productivity.

Suggested citation: Andrea Boitani, Marcella Nicolini, Carlo Scarpa, Do competition and ownership matter? Evidence from local public transport in Europe, Applied Economics, Volume 45, Issue 11, 2013, DOI: 10.1080/00036846.2011.617702

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