Study on the Operation Efficiency of Toll Roads in China from the Perspective of Scale Economy

Abstract

Although China’s toll highways are world-renowned, they suffer from indisputable operational inefficiencies. Operationally, China’s toll highway sector is characterized by an administrative monopoly. In particular, governmental loan-repayment highways have such characteristics as franchising, monopoly, and “one highway by one company.” Hence, this study concentrates on the relationship between economic performance, administrative monopoly, and scale efficiency with respect to toll highways, and explores how the China-specific administrative monopoly affects the transformation of toll highways from scale to efficiency. Using the globally referenced data envelopment analysis- (DEA-) Malmquist Index, this study first measures the operational efficiency of China’s toll highway sector from 2010 to 2017. Based on provincial panel data, this paper then discusses the relationship between toll highway scale and economic performance through system-generalized method of moments estimation and verifies the status quo of the transformation of toll highways from scale to efficiency. From the provincial and industrial perspectives, this study further verifies how an administrative monopoly restricts the transformation from scale to total factor productivity and scale efficiency through the unique operation pattern in the toll highway sector. Finally, this study conducts an extended analysis of the relationship between operational efficiency and debt in the toll highway sector. The administrative monopoly is found to increase the debt burden of the toll highway sector and to have a negative impact on the long-term sustainability of the sector.

The interindustry wage differentials by sector in China: What is the role of union density?

“…Yan and Pu (2014) evaluated the forms and origins of administrative monopolies in the petrochemical industry and argued that administrative monopolies cause factor-price distortions. Li (2010) and Xu et al (2021) reached a similar conclusion from an analysis of China's toll road and taxi industries. Most of these monopoly industries, such as oil and highways, belong to the public sector and are operated by large state-owned enterprises in China (i.e., Sinopec Group).…”

Spatial imbalance and factors influencing carbon emission efficiency in China’s transport industry

“…In response to global climate change, China declared its intention to achieve peak carbon emissions by 2030 and carbon neutrality by 2060 (Lin and Wang, 2020;Zheng et al, 2021). In February 2021, the Chinese government issued the Guidelines on Developing Comprehensive Transport Network, emphasising the need to accelerate the development of green and low-carbon transport and achieve peak carbon emissions in the transport sector as soon as possible (Xu et al, 2021). The carbon emissions efficiency is an important indicator of the development level of a low-carbon economy.…”

The impact of technological innovation on transport carbon emission efficiency in China: Spillover effect or siphon effect?

“…The report of the Communist Party of China's 19th National Congress pointed out that scientific and technological innovation is not only a critical factor in achieving the carbon emission reduction target and developing a low-carbon economy, but also an inherent requirement for China's high-quality economic development. It has become the main driving force of carbon emission reduction in China, and the improvement of carbon emission efficiency has also forced the government and enterprises to carry out scientific and technological innovation to varying degrees ( 6 ).…”