Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry
Discussions of competition and regulatory reform typically focus on price and quantity effects. But improving certain infrastructure services can also stimulate entry, and competition in user industries downstream, allowing new firms to enter, incu...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2000/04/437759/regulatory-reform-competition-innovation-case-study-mexican-road-freight-industry http://hdl.handle.net/10986/22187 |
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okr-10986-22187 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADMINISTRATIVE PROCEDURES AIM AUTOMOBILES BOTTLENECK BOTTLENECKS BRIDGES CAPITAL MARKETS CAPITAL REQUIREMENTS CARGO CARGO HANDLING CARGOES CARRIERS CARS CARTELS CITIES COMMUNICATION SERVICES COMPETITION LAW COMPUTER SYSTEMS CONCESSIONS CONSUMER GOODS CONTAINER HANDLING CONTAINER TRAFFIC CONTAINERS CRANES CUSTOMS CUSTOMS FACILITIES DEBT DELIVERIES DEREGULATION DISTRIBUTION NETWORK DISTRIBUTORS DRAYAGE ECONOMIC ACTIVITY ECONOMIC ANALYSIS EMPLOYMENT FIXED COSTS FRAMEWORK FREIGHT FREIGHT CENTERS FREIGHT FORWARDERS FREIGHT SERVICES FREIGHT TRANSPORT FUEL GATT HANDLING HAULAGE HAULING HIGHWAYS INCOME INNOVATIONS INSURANCE INTERMODAL TRANSPORT INTERNATIONAL TRADE INVENTORIES INVENTORY INVENTORY MANAGEMENT INVENTORY SYSTEMS LAND TRANSPORT LOGISTICS COSTS LOGISTICS MANAGEMENT MANUFACTURING MARKET POWER OIL OIL PRICES ORDERING OUTSOURCING PASSENGER POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLLUTION PORTS PRICE FIXING PRICE SETTING PRODUCERS PRODUCTIVITY REGULATORY REFORM ROAD MAINTENANCE ROAD TRANSPORT ROAD TRANSPORT INDUSTRY ROADS ROUTES SAFETY SECURITIES SHIPMENTS SHIPPERS SHIPPING SHIPPING COMPANIES STRUCTURES SUPPLY CHAIN MANAGEMENT SURCHARGES SUSTAINABLE GROWTH TELECOMMUNICATIONS THIRD- PARTY PROVIDERS TRACTORS TRAFFIC TRAILERS TRAINING COURSES TRANSACTION COSTS TRANSPORT SERVICES TRANSPORTATION TRANSPORTATION SERVICES TRUCKING TRUCKS VARIABLE COSTS VEHICLES WAGES WAREHOUSING WELFARE GAINS |
| spellingShingle |
ADMINISTRATIVE PROCEDURES AIM AUTOMOBILES BOTTLENECK BOTTLENECKS BRIDGES CAPITAL MARKETS CAPITAL REQUIREMENTS CARGO CARGO HANDLING CARGOES CARRIERS CARS CARTELS CITIES COMMUNICATION SERVICES COMPETITION LAW COMPUTER SYSTEMS CONCESSIONS CONSUMER GOODS CONTAINER HANDLING CONTAINER TRAFFIC CONTAINERS CRANES CUSTOMS CUSTOMS FACILITIES DEBT DELIVERIES DEREGULATION DISTRIBUTION NETWORK DISTRIBUTORS DRAYAGE ECONOMIC ACTIVITY ECONOMIC ANALYSIS EMPLOYMENT FIXED COSTS FRAMEWORK FREIGHT FREIGHT CENTERS FREIGHT FORWARDERS FREIGHT SERVICES FREIGHT TRANSPORT FUEL GATT HANDLING HAULAGE HAULING HIGHWAYS INCOME INNOVATIONS INSURANCE INTERMODAL TRANSPORT INTERNATIONAL TRADE INVENTORIES INVENTORY INVENTORY MANAGEMENT INVENTORY SYSTEMS LAND TRANSPORT LOGISTICS COSTS LOGISTICS MANAGEMENT MANUFACTURING MARKET POWER OIL OIL PRICES ORDERING OUTSOURCING PASSENGER POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLLUTION PORTS PRICE FIXING PRICE SETTING PRODUCERS PRODUCTIVITY REGULATORY REFORM ROAD MAINTENANCE ROAD TRANSPORT ROAD TRANSPORT INDUSTRY ROADS ROUTES SAFETY SECURITIES SHIPMENTS SHIPPERS SHIPPING SHIPPING COMPANIES STRUCTURES SUPPLY CHAIN MANAGEMENT SURCHARGES SUSTAINABLE GROWTH TELECOMMUNICATIONS THIRD- PARTY PROVIDERS TRACTORS TRAFFIC TRAILERS TRAINING COURSES TRANSACTION COSTS TRANSPORT SERVICES TRANSPORTATION TRANSPORTATION SERVICES TRUCKING TRUCKS VARIABLE COSTS VEHICLES WAGES WAREHOUSING WELFARE GAINS Dutz, Mark A. Hayri, Aydin Ibarra, Pablo Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| geographic_facet |
Latin America & Caribbean Central America Mexico |
| relation |
Policy Research Working Paper;No. 2318 |
| description |
Discussions of competition and
regulatory reform typically focus on price and quantity
effects. But improving certain infrastructure services can
also stimulate entry, and competition in user industries
downstream, allowing new firms to enter, incumbent users to
offer new products, and rivalry to intensify. The authors
present a case study of how innovations in road freight
services affect selected downstream users of those services
after regulatory reform. After a period of rigid regulation,
and heavy government interference, Mexico in 1989 developed
a new policy framework for road transport, with free entry,
and market-based price setting. The result: faster, more
reliable trucking has allowed user companies to offer new,
previously unavailable products, and to reach new areas with
existing products. Cheaper, more customer-responsive
trucking services have allowed logistical innovations in
user firms, and some user firms have decided not to keep
their own fleets of trucks, but to outsource trucking
services on the open market, thereby converting fixed costs
to variable costs. For one fertilizer company, the benefits
of reform included a ten percent improvement in operating
margin. Successful reform requires careful planning and
execution, and political support at high levels. Regulatory
reform also profoundly changes the sectoral institution
formerly responsible for the regulation. Enough resources
should be provided to help organizations in the reformed
industry make the transition to the post-reform environment
- helping with such tasks as defining the organizations new
role, and facilitating the redeployment of staff. The
national competition agency can help greatly in laying the
groundwork for reform by making a compelling case for the
reforms expected benefits. After reform, the competition
agency should also help with enforcement, to ensure that the
cozy, cartel-like behavior stimulated by tight entry
restrictions does not persist. In Mexico, three strong
interventions were required to discipline attempted
anti-competitive practices in the trucking industry in the
years following reform. |
| format |
Working Paper |
| author |
Dutz, Mark A. Hayri, Aydin Ibarra, Pablo |
| author_facet |
Dutz, Mark A. Hayri, Aydin Ibarra, Pablo |
| author_sort |
Dutz, Mark A. |
| title |
Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| title_short |
Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| title_full |
Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| title_fullStr |
Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| title_full_unstemmed |
Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry |
| title_sort |
regulatory reform, competition, and innovation : a case study of the mexican road freight industry |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2000/04/437759/regulatory-reform-competition-innovation-case-study-mexican-road-freight-industry http://hdl.handle.net/10986/22187 |
| _version_ |
1764449827516579840 |
| spelling |
okr-10986-221872021-04-23T14:04:06Z Regulatory Reform, Competition, and Innovation : A Case Study of the Mexican Road Freight Industry Dutz, Mark A. Hayri, Aydin Ibarra, Pablo ADMINISTRATIVE PROCEDURES AIM AUTOMOBILES BOTTLENECK BOTTLENECKS BRIDGES CAPITAL MARKETS CAPITAL REQUIREMENTS CARGO CARGO HANDLING CARGOES CARRIERS CARS CARTELS CITIES COMMUNICATION SERVICES COMPETITION LAW COMPUTER SYSTEMS CONCESSIONS CONSUMER GOODS CONTAINER HANDLING CONTAINER TRAFFIC CONTAINERS CRANES CUSTOMS CUSTOMS FACILITIES DEBT DELIVERIES DEREGULATION DISTRIBUTION NETWORK DISTRIBUTORS DRAYAGE ECONOMIC ACTIVITY ECONOMIC ANALYSIS EMPLOYMENT FIXED COSTS FRAMEWORK FREIGHT FREIGHT CENTERS FREIGHT FORWARDERS FREIGHT SERVICES FREIGHT TRANSPORT FUEL GATT HANDLING HAULAGE HAULING HIGHWAYS INCOME INNOVATIONS INSURANCE INTERMODAL TRANSPORT INTERNATIONAL TRADE INVENTORIES INVENTORY INVENTORY MANAGEMENT INVENTORY SYSTEMS LAND TRANSPORT LOGISTICS COSTS LOGISTICS MANAGEMENT MANUFACTURING MARKET POWER OIL OIL PRICES ORDERING OUTSOURCING PASSENGER POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLLUTION PORTS PRICE FIXING PRICE SETTING PRODUCERS PRODUCTIVITY REGULATORY REFORM ROAD MAINTENANCE ROAD TRANSPORT ROAD TRANSPORT INDUSTRY ROADS ROUTES SAFETY SECURITIES SHIPMENTS SHIPPERS SHIPPING SHIPPING COMPANIES STRUCTURES SUPPLY CHAIN MANAGEMENT SURCHARGES SUSTAINABLE GROWTH TELECOMMUNICATIONS THIRD- PARTY PROVIDERS TRACTORS TRAFFIC TRAILERS TRAINING COURSES TRANSACTION COSTS TRANSPORT SERVICES TRANSPORTATION TRANSPORTATION SERVICES TRUCKING TRUCKS VARIABLE COSTS VEHICLES WAGES WAREHOUSING WELFARE GAINS Discussions of competition and regulatory reform typically focus on price and quantity effects. But improving certain infrastructure services can also stimulate entry, and competition in user industries downstream, allowing new firms to enter, incumbent users to offer new products, and rivalry to intensify. The authors present a case study of how innovations in road freight services affect selected downstream users of those services after regulatory reform. After a period of rigid regulation, and heavy government interference, Mexico in 1989 developed a new policy framework for road transport, with free entry, and market-based price setting. The result: faster, more reliable trucking has allowed user companies to offer new, previously unavailable products, and to reach new areas with existing products. Cheaper, more customer-responsive trucking services have allowed logistical innovations in user firms, and some user firms have decided not to keep their own fleets of trucks, but to outsource trucking services on the open market, thereby converting fixed costs to variable costs. For one fertilizer company, the benefits of reform included a ten percent improvement in operating margin. Successful reform requires careful planning and execution, and political support at high levels. Regulatory reform also profoundly changes the sectoral institution formerly responsible for the regulation. Enough resources should be provided to help organizations in the reformed industry make the transition to the post-reform environment - helping with such tasks as defining the organizations new role, and facilitating the redeployment of staff. The national competition agency can help greatly in laying the groundwork for reform by making a compelling case for the reforms expected benefits. After reform, the competition agency should also help with enforcement, to ensure that the cozy, cartel-like behavior stimulated by tight entry restrictions does not persist. In Mexico, three strong interventions were required to discipline attempted anti-competitive practices in the trucking industry in the years following reform. 2015-07-16T21:53:32Z 2015-07-16T21:53:32Z 2000-04 Working Paper http://documents.worldbank.org/curated/en/2000/04/437759/regulatory-reform-competition-innovation-case-study-mexican-road-freight-industry http://hdl.handle.net/10986/22187 English en_US Policy Research Working Paper;No. 2318 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Central America Mexico |