A comparison of vertical structural types in the railway industry: A simple mathematical explanation model

Fumitoshi Mizutani

Research in Transportation Economics, 2020, vol. 81, issue C

Abstract: This study explores how different types of vertical structure affect the cost of rail organizations. Three types of vertical structure are considered: vertical separation, intermediate organizations, and vertical integration. We focus on the competition factor and managerial factors. A series of our analyses show the following major findings. First, the cost advantageous vertical structure can be explained by the degree of train density. At smaller (larger) train density, vertical separation (integration) is best. At medium train density, an intermediate organization is best. Second, the boundaries distinguishing advantageous vertical structure vary according to several factors. When the effects of misalignment and transaction costs increase, the boundary of organizational structures moves in the smaller train density direction (i.e. the vertical separation side). This means that the range of vertical integration becomes larger. On the other hand, when the specializing cost saving effect increases, the range of vertical separation becomes larger, as the boundary of organizational structures moves in the larger train density direction (i.e. the vertical integration side). Last, the competition effect on the boundary shows no concrete result. This means that the cost advantageous range of vertical separation or vertical integration varies according to the degree of competition and other factors.

Keywords: Vertical structure; Structural reforms; Rail cost; Vertical separation; Competition (search for similar items in EconPapers)
JEL-codes: L22 L33 L51 L92 R40 R48 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885920300639
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:retrec:v:81:y:2020:i:c:s0739885920300639

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

DOI: 10.1016/j.retrec.2020.100865

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().