Working PaperFirst publicationPublished version DOI: 10.48548/pubdata-1214

Economies of Scope in European Railways: An Efficiency Analysis

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Date of first publication2006-08-21
Date of publication in PubData 2024-08-23

Language of the resource

English

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Part of ISSN: 1860-5508
Working paper series in economics

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Abstract

In the course of railway reforms at the end of the last century, European national governments, as well the EU Commission, decided to open markets and to separate railway networks from train operations. Vertically integrated railway companies argue that such a separation of infrastructure and operations would diminish the advantages of vertical integration and would therefore not be suitable to raise economic welfare. In this paper, we conduct a pan-European analysis to investigate the performance of European railways with a particular focus on economies of scope associated with vertical integration. We test the hypothesis that integrated railways realize economies of joint production and, thus, produce railway services on a higher level of e±ciency. To determine whether joint or separate production is more e±cient we apply an innovative Data Envelopment Analysis super-e±ciency bootstrapping model which relates the e±ciency for integrated production to a virtual reference set consisting of the separated production technology and which is applicable to other network industries as energy and telecommunication as well. Our ¯ndings are that for a majority of European Railway companies economies of scope exist.

Keywords

Efficiency; Vertical Integration; Railway Industry; Effizienz; Eisenbahn

Number of the series contribution

29

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More information

DDC

330 :: Wirtschaft

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Research