Import effect on technical efficiency of cargo ports: evidence from Italy, Slovenia, and Croatia

Abstract

The objective of this research is to investigate to what extent the 26 ports included in this study are technically efficient and how different factors can influence efficiency. Through the model presented, we examine the hypothesis which states that imports affect ports' competitiveness and efficiency, so they should be included in the deterministic part of the model because ports are aware of trade impact when making infrastructure changes. The research used the True-fixed Effect Stochastic Frontier model for panel data with time variance (Greene 2005) and implemented the Cobb- Douglas production function with truncated normal distribution and the maximum-likelihood dummy variable estimation method. The model outcome is presented through values of technical efficiency for ten years, and it monitors the Croatian, Italian and Slovenian ports’ response at these significant periods of the European economy.

Keywords: ports, technical efficiency, Stochastic frontier model, true fixed-effects

DOI: 10.7176/JESD/10-22-16

Publication date: November 30^th 2019