Horizontal port integrations under mixed ownership

Abstract

This study examines the effects of horizontal port integrations between public and private ports under mixed ownership. It distinguishes two different types of integrations between adjacent (A-type) and non-adjacent (N-type) integrations, wherein a private port integrates with a neighboring or non-adjacent public port, respectively. Our analysis reveals that, compared with no integration, both types of integrations are profitable for the merged port when the private share of mixed ownership is high. A-type integration consistently improves local and social welfare, whereas N-type integration only achieves this benefit with lower private share levels. However, compared with N-type integration, A-type integration benefits both the port industry and society but harms shippers. This examination of merged entities' non-uniform pricing strategies corroborates conclusions drawn under a uniform pricing regime and underscores the advisability of governmental promotion of integrations between private ports and their neighboring public counterparts.