A stochastic frontier model of the efficiency of major container terminals in Asia: assessing the influence of administrative and ownership structures

Abstract

This paper applies a `port function matrix' to analyse the administrative and ownership structures of major container ports in Asia. The relative efficiency of these ports is then assessed using the cross-sectional and panel data versions of the `stochastic frontier model'. The estimated efficiency measures are broadly similar for the two versions of the model tested. From the results of the analysis, it is concluded that the size of a port or terminal is closely correlated with its efficiency and that some support exists for the claim that the transformation of ownership from public to private sector improves economic efficiency. While this provides some justification for the many programmes in Asian ports which aim to attract private capital into both existing and new facilities, it is also concluded that the level of market deregulation is an important intervening variable which may also exert a positive influence.