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Time Series Analysis of Deregulatory Dynamics and Technical Efficiency: The Case of the U.S. Airline Industry
Article first published online: 25 DEC 2001
DOI: 10.1111/1468-2354.00061
Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association, 2000
1468-2354/asset/cover.gif?v=1&s=fed4433db533e45650aec00d1db3fbb7fcc93278 "International Economic Review")
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How to Cite
Semenick Alam, I. M. and Sickles, R. C. (2000), Time Series Analysis of Deregulatory Dynamics and Technical Efficiency: The Case of the U.S. Airline Industry. International Economic Review, 41: 203–218. doi: 10.1111/1468-2354.00061
Publication History
- Issue published online: 25 DEC 2001
- Article first published online: 25 DEC 2001
As markets worldwide become less regulated, it becomes increasingly possible and timely to establish the presence of an empirical relationship between technical efficiency and market forces compelling agents to economize. This article, taking an innovative approach to test the hypothesis that competitive pressure enhances efficiency, constructs a methodology to examine time series of technical efficiency indices for cointegration and convergence. A panel of U.S. airlines, observed quarterly between 1970 and 1990, is used as a case study. Cointegration results are suggestive of long-run relationships between carriers; furthermore, convergence tests document less dispersion in firm performance over time.