Foreign participation and competition: A way to improve the container port efficiency in China?

► An inverted U-shaped relationship between Chinese ownership and container terminal efficiency is observed. ► Both the intra- and inter-port competition may enhance container terminal efficiency. ► Port efficiency growth may be positively correlated with the hinterland GDP. This paper investigates how the involvement of foreign and local ownerships, intra- and inter-port competition and hinterland affect the container terminal efficiency in China and its neighboring countries. The operational efficiency of sample container terminals is estimated by data envelopment analysis, which is followed by regression analysis to examine factors affecting container terminal efficiency. We find that having some Chinese ownership may make a container terminal more efficient, while a container terminal is less efficient with Chinese as the major shareholder. It is also found that intra- and inter-port competition may enhance container terminal efficiency. Finally, the efficiency growth of terminals is examined, and implications for the regional economic disparity in China are discussed.