European Union expansion and seaport efficiency in the North Adriatic

Abstract

This article looks at the relative economic efficiency of seaports in the North Adriatic, and the effects of expansions of the European Union (EU) on this. Taking the main container ports in the region between 2004 and 2012, variations in efficiency are found over time dependent on whether constant or variable returns to scale are assumed. The consistently high number of ports on the efficiency frontier, however, suggests relatively high degrees of competition between them. The Slovenian port of Kope that came under the EU umbrella in 2014 is consistently efficient, as is the main Croatian seaport that remained outside of the Union over the period considered indicating that membership did not impact on economic efficiency.

Keywords:

• seaports
• economic efficiency
• European Union
• port capacity

JEL Classification:

• L91
• L25
• O52

Notes

¹ In 2012, for example, Trieste handled 411 247 containers, Venezia 429 893, Ravenna 191 000, Koper 570 744, Ploce 17 466, and Rijeka 171 945

² Economists sometimes neglect mathematic programming as an assessment technique, but we follow John Hicks (1960) and it accepted an important tool for quantification in economic analysis.

³ Studies that have used monetary measures generally consider the income the merchandise handled generates, e.g. Cullinane and Song (2003).

⁴ The data are taken from Eurostat: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Maritime_ports_freight_and_passenger_statistics

⁵ Gonzalez and Trujillo (2009) provide a survey of applied empirical works considering port efficiency, including the variables that have been deployed.

⁶ Models looking just at TEUs as the output are also explored, and this does affect the results. For example, regarding the constant returns model, Trieste and Ravenna perform somewhat worse in the earlier years of the time series.

⁷ While this is a general point, it is also seen in other DEA-based port efficiency studies, e.g. Cullinane et al. (2005)