Using non-parametric technologies to estimate returns to scale in the Iberian and international seaports Online publication date: Thu, 14-Aug-2014
by Pedro Carvalho; Rui Cunha Marques
International Journal of Shipping and Transport Logistics (IJSTL), Vol. 4, No. 3, 2012
Abstract: Unlike most studies of performance evaluation in the literature of the seaport industry, this paper intends primarily to investigate if the technology or production frontier is overall constant returns to scale (CRS) or variable returns to scale (VRS) by applying a set of statistical tests and only then estimating the appropriate efficiencies. According to the results, the technology of the sample studied, comprised by 36 of the most important worldwide seaports and 21 Iberian seaports, is characterised by overall CRS for the year 2008. Based on this technology, we found inefficiency levels of about 67.6%. On average, excluding the ports of Singapore and Australia, the northern European seaports are the most efficient ones. It is also shown that in this case study an efficiency analysis by continent would be biased if one had taken a VRS technology, thus demonstrating the importance of investigating primarily the seaport technology.
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