Port management performance and contextual variables: which relationship? Methodological and empirical issues

This paper applies the production framework associated with a mixture of data envelopment analysis (DEA) and stochastic frontier analysis (SFA) to evaluate the relative efficiency of port management across countries. Differently from previous studies, a three stage approach is adopted in order to identify the role of contextual factors on an input-by-input basis. It involves using DEA for evaluating efficiency in the I and in the III stage, and SFA, carried out through fixed-effect estimators, in the II stage. The latter for controlling the role of external environment in determining input-specific efficiency differentials across ports. The sample is composed of 30 ports observed over the period 1995–2009. The outcome of the DEA applied in the III stage shows that netting inputs of the impact of factors considered outside direct ports' managers control, relative performances of ports change significantly. Any evaluation procedure of port performance should take into account the effect of contextual variables, as identified not only through overall efficiency, but also through input performance.