Spatial non-price competition in port infrastructure services

Hidalgo-Gallego, Soraya and Núñez-Sánchez, Ramón and Coto-Millán, Pablo (2017): Spatial non-price competition in port infrastructure services.

Abstract

This study analyses the possible existence of spatial non-price competition in the port industry. We propose a dynamic two-stage model that allows: (1) to estimate the sensitivity of generation and diversion of traffic caused by port capacity expansions; (2) to quantify the degree of capacity competition; (3) to simulate a hypothetical scenario of cooperation agreements among different port authorities. The econometric specification is based on a structural model of demand, cost and market equilibrium. The empirical results suggest that non-price competition exists in port infrastructure services. Furthermore, using a simulation analysis, we show that incentives to invest in port capacity decrease under a cooperative setting.

• Item Type: MPRA Paper
• Language: English
• Keywords: Strategic interdepence; imperfect competition; port capacity; port alliances
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; D - Microeconomics > D4 - Market Structure, Pricing, and Design; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities

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