Vertical divestiture as a competitive strategy: The case of railway passenger transport reform in Russia
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Dementiev, AndreiAbstract
We consider the vertical access model of the rail passenger sector in Russia and formally analyse the attractiveness of complete vertical divestiture as an option for the future reform steps. The integrated infrastructure company (RZD) serves also the passenger market and is engaged ...
See moreWe consider the vertical access model of the rail passenger sector in Russia and formally analyse the attractiveness of complete vertical divestiture as an option for the future reform steps. The integrated infrastructure company (RZD) serves also the passenger market and is engaged in sabotage in order to disadvantage existing or potential rivals of its downstream affiliate – Federal Passenger Directorate. We found that the welfare gain from the vertical divestiture may depend on the nature and toughness of downstream competition and be irrelevant to the size of scope economies and maximum level of sabotage. JEL classifications: L51, L22 Key words: downstream competition, constrained capacity, sabotage
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See moreWe consider the vertical access model of the rail passenger sector in Russia and formally analyse the attractiveness of complete vertical divestiture as an option for the future reform steps. The integrated infrastructure company (RZD) serves also the passenger market and is engaged in sabotage in order to disadvantage existing or potential rivals of its downstream affiliate – Federal Passenger Directorate. We found that the welfare gain from the vertical divestiture may depend on the nature and toughness of downstream competition and be irrelevant to the size of scope economies and maximum level of sabotage. JEL classifications: L51, L22 Key words: downstream competition, constrained capacity, sabotage
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Date
2007-01-01Licence
Copyright the University of SydneyCitation
International Conference Series on Competition and Ownership in Land Passenger Transport – 2007 – Hamilton Island, Queensland, Australia – Thredbo 10Share