The relationship between port-level maritime connectivity and efficiency

This paper examines the empirical relationship between maritime connectivity and port efficiency. To do so, a stochastic output distance function is employed which permits the effect of connectivity on port technical efficiency to be estimated for a sample of Spanish ports. Previous studies analysing the relationship between efficiency and connectivity have used country-level connectivity indices. In the present study, port-level connectivity indices are used for the first time for this type of analysis. A novel panel dataset of 16 Spanish ports observed over the period 2006–2016 is constructed by crossing port-level connectivity information from UNCTAD's Port Liner Shipping Connectivity Index (PLSCI) with port-level production data from Spanish port authorities. The results from our estimation show a positive relationship between connectivity and port efficiency. It is found that relatively modest improvements in observed connectivity are associated with large differences in expected output.