Technical and Scale Efficiency Analysis of 25 Nort Mediterranean Ports: A Data Envelopment Analysis Approach

Abstract

The strategic position of the northern Mediterranean ports gained importance with the announcement of Chinese investments, which form part of the One Belt One Road project. The research presented in this paper focuses on small ports, which have not heretofore been the subject of interest. In the first half of 2019, both Croatia and Italy agreed on participation in the project, which aims to shorten the journey from China to central Europe by changing sea route destinations to ports in the Adriatic Sea. This paper examines the technical and scale efficiency of 25 ports in Croatia, Italy and Slovenia, as a possible prerequisite for investments. The research uses Data Envelopment Analysis (DEA) variable returns to scale an output-oriented model on a panel data sheet, for 25 ports in the period from 2009 to 2018. This research suggests that the number of efficient ports, in this case, is not directly related to the size of the port or to the country in which it is located. However, it is more often the case that larger ports are more efficient. For all inefficient ports, the DEA provides best practice examples to which ports should aspire and therefore highlights the practical implication of the work.