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Parametric estimation of inefficiency in cargo handling in Spanish ports

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Abstract

Port workers services have been usually heavily regulated and reserved exclusively for a special kind of workers, dockworkers, which seems to have been the cause of serious inefficiencies worldwide. During the eighties, law reforms have been introduced to solve this problem. In this paper we analyze and decompose efficiency in cargo handling operations in 19 Spanish ports from 1990 to 1998. The method chosen is that of the parametric estimation of both allocative and technical inefficiency using panel data and a quadratic cost function. Results show that although inefficiency has decreased overall, there has been over utilization of labor regarding capital, and technical inefficiency. This supports the need of further consideration of other aspects including competition.

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Notes

  1. A general review on port performance can be seen in Cullinane et al. (2006).

  2. Available in “Noticias y novedades”, http://www.aneconom.ull.es/embudria/.

  3. A restricted version of the model was estimated, eliminating fixed effects. Allocative efficiency indices are lower than the unrestricted version by 4.2%.

  4. When the second stage model contains variable constructed from parameters estimated in the first stage, the covariance matrix of the second stage estimator includes noise induced by the first-stage estimates. We have applied the procedure of Murphy and Topel (1985) that give the correct asymptotic covariance matrix of the two stage estimation with least squares when both stages use the same observations.

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Acknowledgements

This research has been funded by Ministerio de Educación y Ciencia, Plan Nacional de I+D+I, España, Grant SEC2002-01940ECO; by Fondecyt, Chile, Grant 1080140, and the Millennium Institute on Complex Engineering Systems. We are particularly grateful for the suggestions in form and contents made by the Associate Editor on earlier versions of this paper. We also thank Julio Afonso-Rodríguez and Jorge V. Pérez-Rodríguez for their helpful econometric comments. Remaining errors are, of course, ours.

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Authors and Affiliations

  1. Instituto Universitario de Desarrollo Regional, Departamento de Analisis Economico, Universidad de La Laguna, Camino de La Hornera s/n, La Laguna, 38071, S/C de Tenerife, Spain

    Juan José Díaz-Hernández & Eduardo Martínez-Budría

  2. Departamento de Ingenieria Civil, Universidad de Chile, Santiago, Chile

    Sergio Jara-Diaz

Authors
  1. Juan José Díaz-Hernández
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  2. Eduardo Martínez-Budría
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  3. Sergio Jara-Diaz
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Correspondence to Juan José Díaz-Hernández.

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Díaz-Hernández, J.J., Martínez-Budría, E. & Jara-Diaz, S. Parametric estimation of inefficiency in cargo handling in Spanish ports. J Prod Anal 30, 223–232 (2008). https://doi.org/10.1007/s11123-008-0110-x

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