An Analysis of the Effects on Rail Operational Efficiency Due to a Merger between Brazilian Rail Companies: The Case of RUMO-ALL

Francisco Gildemir Ferreira da Silva, Renata Lúcia Magalhães de Oliveira, Marin Marinov

Research output: Contribution to journalArticle

Abstract

Mergers between companies are motivated by synergy effects that can improve profitability. On February 11, 2015, the Administrative Council for Economic Defense (Cade) approved, the merger between America Latina Logística (ALL), the largest railroad transport company in Brazil and Rumo Logistics (RUMO), an operator with national impact with restrictions, and formed a new entity RUMO-ALL. The approval of this merger suggested that there could be an increase in operational efficiency without compromising the competition. In this work, the operational efficiency of RUMO-ALL is evaluated using Data Envelopment Analysis (DEA) models for the return of adequate scale. Statistical tests of structural break are performed in order to understand if there are an ex-post merger effects on the operational efficiency after the expansion of the service. The results indicate that the rail service after the merger is efficient, but with marginal reduction of production with an increase of input, which is expected according to neoclassical economic theory for monopolies.
Original languageEnglish
Article number4827
JournalSustainability
Volume12
Issue number12
DOIs
Publication statusPublished - 12 Jun 2020

Bibliographical note

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Keywords

  • Brazil
  • DEA
  • Mergers
  • Operational efficiency
  • Rail

Fingerprint Dive into the research topics of 'An Analysis of the Effects on Rail Operational Efficiency Due to a Merger between Brazilian Rail Companies: The Case of RUMO-ALL'. Together they form a unique fingerprint.

  • Cite this