Marina DI GIACOMO
Università degli Studi di Torino -  Facoltà di Economia

Abstract - A growing number of local public transportation (LPT) companies diversify their production lines by providing a large set of services. In particular different strategies are observed depending on the ownership structure: while private firms mainly supply competitive markets, usually highly correlated to the core business (e.g. bus renting and coaching activities), publicly owned companies (mainly municipal firms) offer a very large set of products in regulated sectors, ranging from car park management to waste disposal, water and sewage treatment and gas and electricity distribution. The cost properties of a sample of LPT companies operating in Piedmont, a Northern Italy region, are investigated and the presence and the magnitude of scope economies are assessed. The results from different functional forms are compared and estimates point towards the presence of global economies of scope. Scope economies for the median firm range between 16% and 30% depending on the output definition and the chosen cost function. Public firms always show lower scope economies. Global density economies are also detected, but they disappear when product specific density economies are considered.

The general picture seems to be characterized by local public transport firms that enjoy global scope economies, that are particularly high for private firms, i.e. for small to medium sized firms that diversify in competitive industries. Public firms are characterized by lower scope economies, and sometimes diseconomies, both because of their larger size and because of their chosen production structure.