Ownership, Contractual Practices and Technical Efficiency: The Case of Urban Public Transport in France

This paper investigates the impact of ownership structure and contractual choices on technical efficiency in the French urban public transport sector. The central proposition, which relies on classical contract theory arguments, is that ownership regime and contractual practices are key determinants of performance. To test this proposition, the authors use an original panel data set covering 135 different French urban transport networks over the period 1995-2002 and apply a stochastic frontier methodology. The econometric results corroborate their proposition that the technical efficiency of urban public transport operators depends on the ownership regime and on the type of contract governing their transactions. © 2007 LSE and the University of Bath