Mediterranean islands of the European Union (EU) have traditionally suffered from a lack of regularity in supplying public transportation due to the high seasonality of the demand for scheduled transport services. The insular fact forces people and goods to be carried either by sea or air, and therefore needs to actively stimulate interest in operating specific routes by proper carriers. As regional economies on insular territories also have a tight dependence on tourism, it is vital to achieve an appropriate balance between the need for effective public transportation and sustainable means of transport. This paper aims to provide an approach to the Public Service Obligation (PSO) system imposed on air routes serving the regional transport needs of the Balearic Islands. This study has analyzed data relating to freight and passenger traffic in the period between 2004 and 2019 from scheduled air services linking Palma de Mallorca with Ibiza and Menorca, as well as those between Menorca and Ibiza, and to their respective short-sea links. Results obtained in the research suggest that PSO impositions, together with significant improvement in the resident subsidy schema (from 50% to 75%), have recently led to a sharp increase in the demand for passenger air services on these routes; thus, avoiding the tender for the award of a public contract. However, it has led to a dramatic fall of freight transport on air routes concerned, as such, public intervention on the air market has only sought to ensure the mobility of passengers.
In economic literature, the relationship between entrepreneurship and economic growth has been widely discussed for some time now. In addition to the different theoretical approaches, a considerable amount of empirical works in recent decades have sought to verify the direct link between both variables by analyzing datasets from several distinct geographic areas. On one hand, it highlights the absence of a common indicator to measure entrepreneurship in practice relating to a country’s economic growth; on the other hand, it shows a great diversity of factors determining them. With the aim of providing new empirical evidence in the field of European entrepreneurship, this paper has analyzed data relating to 31 European countries over the last decade by introducing self-employment as an empirical proxy of entrepreneurship. In particular, this study contrasts the positive effect of public expenditure, investment, human capital, and entrepreneurship on economic growth for a wide range of countries and examines the impact of some economic and educational variables on self-employment, such as unemployment, taxes, education, and early school leaving. The estimation method used in this research had to consider the Ordinary Least Squares through a multiple regression model of constant coefficients based on annual Eurostat statistics for the period of 2010 to 2019. The results obtained verify the positive effect of public expenditure, investment, human capital, and entrepreneurship on economic growth. Moreover, the analysis of other factors affecting entrepreneurship, segregated by gender, shows how unemployment and the level of education have a positive impact on self-employment, while significant increases in the tax rate on capital and early school leaving harmed such variable. No significant differences were found between males and females.
Airlines are open to and enjoy a high standard of regulations within the EU Internal aviation market. However, scheduled air services are at times restricted to the access of single markets due to the imposition of public service obligations. This situation is regarded as market failure so this chapter addresses some key aspects in which these impositions can provide elements to create value in regional economies and the private sector through entrepreneurship and innovation. To this end, authors analyze the importance of such fundamental concepts in the transportation sector in regard to air routes not sufficiently covered by carriers in a free market regime despite business opportunity or lack of profitability. This chapter suggests how to improve participation of entrepreneurial companies in tender processes and award of contracts for these specific impositions.
The objective of this paper is to examine how the imposition of Public Service Obligations (PSO) on certain routes may affect the transportation sector, with a focus on aviation in the European Single Market. Thus, this research investigates how this form of public intervention can be useful to access adequeate transport system in remote and peripherical regions. Subsequently, this paper intends to display that the imposition of PSO on aviation routes should be considered as a unique mean of market intervention on behalf of territorial cohesion. To accomplish this, an analysis of the economic impact in terms of efficiency and sustainability in the case of the scheduled air route between Almeria and Melilla in addition to other transportation alternatives such the bus or train was conducted. Additionally, this research attempts to shift the research focus away from PSO routes in order to determine the convenience of administrative concession as a way to foster the creation of specific routes, which furthermore cannot be covered by the entrepreneurship of private initiative in a free market regime. Consequently, this approach recognises that this form of public intervention is a way of correcting particular market failures, such as the lack of the adequate transportation.
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