Impact of on-track competition on public finances – The case of the Czech Republic

Jandová, Monika; Paleta, Tomáš

doi:10.1016/j.jrtpm.2019.100145

Cited by 11 publications

(7 citation statements)

References 25 publications

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“…Differently from other European countries, the complete vertical separation of Czech railways made the entry easier, but the Czech competitors faced predatory pricing from the subsidized incumbent (Tomeš & Jandová, 2018) and both suffered significant losses. At the same time, also the burden of rail services on public budget rose, both for PSO and discounted fares compensation (Jandová & Paleta, 2019). Slovakia partially shares the history of Czechia, but without “national” competitors, the incumbent was challenged by Czech ones.…”

Section: Open-access Competition In Europe and Focus On Pricesmentioning

confidence: 99%

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Beria

Tolentino

Shtele

et al. 2022

Competition and Regulation in Network Industries

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The effect of competition on prices in the passenger transport sector can be difficult to estimate because of many influencing factors such as state regulation, demand, seasonality, and reactions of indirect competitors. A case of great interest in the rail sector is Italy, where on-track competition in the high-speed segment has been in place for nearly ten years. The paper aims at answering the question whether—and how much—incumbent’s prices are affected when competition starts on a route previously in monopoly. The case is the start of operations on the Turin–Milan–Venice route, where Italo entered in May 2018. Adopting a difference-in-difference approach, we check if Trenitalia changed the price strategy on the route before and after the entry, with respect to two control groups. The addition of placebo tests allows us to understand the ranges of significance of the results and to estimate the noise level of the estimates. Our findings suggest that the start of competition led to lower prices in the short-medium period. In the specific case, the Milano–Venezia route saw Trenitalia’s prices reduced by 21–26% (±2–5%) in a time span of 84–140 days after Italo’s entry and for advanced bookings from 2 to 10 days. Last-day prices remain unchanged, while early bookings are reduced by just 9%. This price reduction does not remain stable in the longer term, when other effects add up and blur the effect of the entry. Nevertheless, we keep observing a smaller, ∼15%, but still negative prices change.

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Section: Open-access Competition In Europe and Focus On Pricesmentioning

confidence: 99%

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Beria

Tolentino

Shtele

et al. 2022

Competition and Regulation in Network Industries

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“…To date, only a few studies examine the effects of the liberalization of high-speed rail in the Czech Republic (Jandová and Paleta, 2019;Tomeš and Fitzová, 2019). discuss the impacts of the direct competition on the Ostrava-Prague route and concur with Preston et al (1999) that this type of competition leads to a price war-falling ticket prices, an increasing number of connections, improving service quality, and innovations to attract new customers.…”

Section: [Figure 1 About Here]mentioning

confidence: 89%

Liberalizing Passenger Rail: The Effect of Competition on Local Unemployment

Badura¹,

Melecky²,

Melecký³

2021

SSRN Journal

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Competitive passenger rail can help workers access new or better jobs. This paper studies the wider economic impacts on local unemployment of the liberalized passenger rail between Ostrava, the third-biggest city in the Czech Republic, and Prague, its capital. The local impacts are estimated at the LAU 1 level (administrative districts) using the difference-in-differences method. The liberalization motivated the entry of two new private providers. The resulting competition in ticket prices, the number of connections, and service quality had a strong beneficial effect on labor market connectivity. It significantly reduced unemployment in the districts along the line compared with the control districts. The effect weakens with the level of urbanization of the treated district. It could partly transmit through higher firm entry and lower firm exit in the local market, as well as better skill matching on the back of higher inward and outward migration.

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“…In institutional changes conditions, the problems of the public and private instruments implementation effectiveness for regulating socio-economic processes (James et al, 1996); public funding efficiency (Jandová & Paleta, 2019), as well as justification of public finance management vectors that favor public spending reduction over tax increases (Ardanaz et al, 2020) remain controversial.…”

Section: Discussionmentioning

confidence: 99%

Public finance management system in modern conditions

Chornovol

Tabenska

Tomniuk

et al. 2020

Investment Management and Financial Innovations

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The public finance management system is an important lever for equalizing financial and budgetary disproportions in the context of institutional changes. The paper aims to substantiate the directions of development of the public financial management system. Economic and statistical methods and correlation-regression analysis methods are used to determine the relationship between the GDP deflator and the share of revenues, expenditures, the general government budget deficit, and public debt in GDP, assessing the features of the public financial management system in Ukraine and EU countries. This study reveals that one of the main restraining factors in the public finance system development is a significant level of uncertainty in economic processes, which intensifies macroeconomic fluctuations, significant indicators of the share of public debt and budget deficit of the state administration sector pose risks to financial and economic stability; their potential negative impact on socio-economic processes is much more destructive than the pro-cyclical nature of fiscal policy. From this point of view, the public finance management system should be directed at optimizing financial and budgetary tools to prevent the growth of public debt and budget deficit in gross domestic product, which determines the importance of substantiating further development directions of the public financial management system. It is concluded that the mechanism of public financial management in recent years is quite rigid and restrictive, in the context of institutional change expands the tools of public financial management and increases its impact on socio-economic processes.

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Impact of on-track competition on public finances – The case of the Czech Republic

Cited by 11 publications

References 25 publications

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Liberalizing Passenger Rail: The Effect of Competition on Local Unemployment

Public finance management system in modern conditions

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