The impact of competition and environmental factors on technical inefficiency of European ports

Abstract

The goal of this study is to assess the effects of competition and environmental factors on technical inefficiency of European ports using the approach in two steps of Simar and Wilson (2007). During the first stage, a non-parametrical DEA method (Data Envelopment Analysis) provided us with the means to compare efficiency scores of 30 ports related to 9 European countries, these ports deemed as the largest container ports. During the second stage, we have used a truncated bootstrap regression so as to identify the determinants of the technical efficiency. Results show that an intense inter-port competition leads to over-investment and a decrease in technical efficiency.