The relationship between privatization and DEA estimates of efficiency in the container port industry

A major objective of port privatization is to improve the efficiency of the sector. This paper presents the pros and cons of port privatization and provides an empirical examination of the relationship between privatization and relative efficiency within the container port industry. Data envelopment analysis (DEA) is justified as the chosen methodology for analysing the relative efficiency of container ports and is applied in a variety of configurations to industry panel data. The paper concludes with the rejection of the hypothesis that greater private sector involvement in the container port sector irrevocably leads to improved efficiency. (C) 2005 Elsevier Inc. All rights reserved.