European transport industry deregulation: An analytical investigation of the impact on incumbents’ managerial efficiency, 1988-2015
ISSN: 2040-8269
Article publication date: 8 July 2019
Issue publication date: 4 September 2019
Abstract
Purpose
This paper aims to examine the impact of deregulation on the European transport industry in the form of privatization, on the managerial efficiency of a panel of deregulated transport companies.
Design/methodology/approach
This research examines a data set of 25 deregulated transport companies from a sample of 12 EU nations from 1988 to 2015. Some studies have analyzed deregulation by using non-parametric models. However, only a limited number of studies focus on the impact of deregulation on the managerial efficiency. This study answers two questions: whether deregulation, in the form of privatization, in the transport sector has any effect on the managerial efficiency, on the profitability and on the investment decisions of the firm, and whether this premise is robust enough across the European transport industry. This study formulates a multivariate regression framework utilizing data from major privatized European transport companies. The final panel includes 25 companies, from 12 EU - Member States for the period 1988-2015, equaling 375 firm-year observations based on a rigorous selection methodology.
Findings
The study confirms that transport companies, post-privatization, are more efficient regarding operating efficiency and profitability. The authors find no evidence that deregulation improves investment efficiency.
Social implications
The study addresses the regulators’ dilemma, whether to deregulate, by focusing on analyzing the improvement of the managerial efficiency.
Originality/value
This study contributes to the transport industry management literature in three ways. First, the authors update the literature of the economic theory of regulation with an empirical examination which covers the latest years across the EU Member States. Second, the authors introduce a comparison of the effects of deregulation on different components of the managerial efficiency, namely, investment, profitability and operating efficiency of the incumbents in the EU transport industry. Third, they examine deregulation by using two approaches: a traditional one where deregulation is a dummy variable assessing the overall effect on incumbents’ efficiency performance; and a novel approach where the Organisation for Economic Co-operation and Development’s deregulation index is used to measure the regulation intensity, accounting also for industry-wide impact assessment. This two-sided approach increases the robustness of the results.
Keywords
Acknowledgements
This paper has been partially co-financed by the European Union (European Social Fund – ESF) and Greek national funds through the Operational Program “Education and Lifelong Learning” of the National Strategic Reference Framework (NSRF) – Research Funding Program: Heracletus II. Investing in knowledge society through the European Social Fund.
Conflict of interest: The corresponding author states that there is no conflict of interest.
Author’s contribution: Dr Ioannis Koliousis: Literature Search and Review, Manuscript Writing, Model Formulation and Analysis, Editing, Results’ Discussion and Proof reading; Dr Dongmei Cao: Contribution to the literature review, improvement of the positioning of the paper, structure, statistics and reporting of results; drafting of the final version of the paper; Panagiotis Koliousis: Model calibration and robustness analysis, drafting of the final version of the paper.
Citation
Koliousis, I., Cao, D. and Koliousis, P. (2019), "European transport industry deregulation: An analytical investigation of the impact on incumbents’ managerial efficiency, 1988-2015", Management Research Review, Vol. 42 No. 9, pp. 1095-1115. https://doi.org/10.1108/MRR-04-2018-0160
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited