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Spatial competition and efficiency: an investigation in the airport sector

Angela Bergantino, Mario Intini and Nicola Volta
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Mario Intini: Management and Business Law, University of Bari Aldo Moro
Nicola Volta: Centre for Air Transport Management, Cranfield University

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper analyses the potential impact of airport competition on technical efficiency by applying the spatial stochastic frontier approach (SSFA) rather than traditional model (SFA). The SSFA allows to isolate the cross-sectional spatial dependence and to evaluate the role of intangible factors in influencing the airport economic performance, through the inclusion of the distance matrix and the shared destinations matrix, calibrated for different distances. By analysing statistical differences between the traditional and the spatial model, it is possible to identify the competition effects. This study includes 206 airports at worldwide level. First, the results show the existence of the spatial component, that could not be otherwise captured by the traditional SFA. Moreover, airport competition is found to affect the efficiency level with either a positive or a negative effect, depending on the distance considered in the spatial model.

Keywords: Transportation; Major Airports; Efficiency Analysis; Spatial Interaction; Airport Competition. (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-eff, nep-tre and nep-ure
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