Productivity and convergence in Norwegian container seaports: An SFA-based Malmquist productivity index approach

Abstract

This paper examines the productivity of Norwegian container seaports and the extent to which the initially less productive seaports are converging/diverging in productivity in relation to the initially more productive seaports. The rationale of the paper is that productivity assessment of Norwegian seaports is scarce in the literature, and studies of convergence/divergence in container seaports are missing in the literature on transportation. The methodology used is the stochastic frontier analysis (SFA)-based Malmquist productivity index (MPI) to assess productivity. To infer productivity convergence/divergence over the years, Beta (Β) and Sigma (Γ) types of convergence/divergence are used. The data used are for the 2002–2014 period and include comparable container seaports from the Nordic countries and the UK to increase the discriminatory power in the analyses and to compare the Norwegian container seaports with their peers. The results attest that (i) there has been annual average total productivity improvement across seaports of approximately 9.7%, (ii) the productivity improvement observed has been due to improvement in pure efficiency change of approximately 11% and scale efficiency improvement of approximately 3.2% and a decrease in technical change of approximately 3.2% annually, (iii) Norwegian seaports are also experiencing productivity improvement and are best performers with regard to scale efficiency change, and (iv) there is an indication of convergence among seaports with respect to all productivity indices, suggesting that seaports with initially lower productivity indices progress faster than those with initially higher indices. A major conclusion is that the overall productivity of seaports has improved, and the productivity growth rates have converged.