Network effects in the East Asia container ports industry

Abstract

This paper proposes an integrated set of 4Cs indices, namely, centrality index, competition index, congestion index and concentration index to examine network effects in the East Asia container port industry. Empirical analysis confirms that larger ports enjoy greater direct network effects related to economies of scale, whereas, smaller ports leverage on indirect network effects to widen their scopes of influence to attract vessel calls. Ports tend to engage in more competitive interactions with their counterparts within the same region, even though cooperative relationships among ports across regions are beneficial. In the light of the empirical results, the paper proceeds to explain some important managerial and policy implications.