Impact of Performance Indicators and Labour Endowment on Traffic: Empirical Evidence from Indian Ports

Abstract

The nineties of the last century have witnessed the emergence of a new role the port infrastructure can play. Governments around the world have undertaken drastic measures for improving the operational efficiency of national ports through institutional reforms. Billions of private capital have been pledged for capacity expansion and service modernisation in the world port system during 1991–1998. Although India has recently opened this sector for private investments, the performance of the port system is not up to the mark. This paper attempts to find out the role played by port performance indicators (derived from principal component analysis) and labour endowment in determining port traffic in a comparative static framework. Even the use of OLS regression has come out with very satisfactory results. Both explanatory variables have been found to exert positive and significant impact upon port traffic. Finally, the use of a time dummy indicates some sort of stagnancy in Indian ports since liberalisation in 1991.