Economic efficiency in Spanish ports: some empirical evidence

TLDR

The study estimates the economic efficiency of Spanish ports using a stochastic frontier cost function applied to panel data. The authors estimate this model with annual data from 27 Spanish ports spanning 1985–1989. The translog specification best fits the data, showing that larger ports are relatively more inefficient, that large‑scale economies exist, and that no technical progress occurred during the period.

Abstract

In this study, a stochastic frontier cost function is used to estimate the econmic efficiency of Spanish ports through panel data. The sample covers annual data of 27 Spanish ports from 1985–1989. By comparing a Cobb-Douglas function with a translog, it is found that the latter best represents the technology according to the data. Analysing the efficiency indices obtained, it is found that the relatively larger ports are more economically inefficient. Moreover, the presence of large scale economies has been detected, as well as a lack of technical progress for the period considered.