Working Paper: CEPR ID: DP8491
Authors: Guido Friebel; Marc Ivaldi; Jrme Pouyet
Abstract: This paper investigates various options for the organization of the railway industry when network operators require the access to multiple national networks to provide international (freight or passenger) transport services. The EU rail system provides a framework for our analysis. Returns-to-scale and the intensity of competition are key to understanding the impact of vertical integration or separation between infrastructure and operation services within each country in the presence of international transport services. We also consider an option in which a transnational infrastructure manager is in charge of offering a coordinated access to the national networks. In our model, it turns out to be an optimal industry structure.
Keywords: network access; transport economics; vertical separation
JEL Codes: L14; L42; L51; L92
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| downstream returns to scale (R12) | vertical integration preferred (L22) |
| vertical integration (L22) | reduce operational costs (D23) |
| returns to scale parameter not too large (D24) | integration in both countries optimal (F15) |
| returns to scale parameter increases (D24) | mixed organization optimal (L29) |
| returns to scale parameter further increases (D24) | preference for separation in both countries (F55) |
| greater competition among transport operators (L91) | favor integration over separation (F55) |
| transnational infrastructure manager (R42) | dominates any other industry organization (L49) |
| horizontal externalities internalization (D62) | dominates any other industry organization (L49) |