Evaluating the performance of privatization on regional transit services: Case study

In this study, we propose three categories of productivity measures of changes in production, service, and consumption following privatization of the Taiwan Motor Transport Company. The results indicate that privatization had a striking impact in terms of total factor productivity on various productivity growths. The results also demonstrate that technical change was the most important factor in the progress in productivity of the new owner, the Guo Gwang Bus Company, while change in efficiency or effectiveness contributed little to this growth. However, results further suggest that the insignificant increase in efficiency and effectiveness in the newly privatized firm may be attributed either to incorrect selection of input combinations or inappropriate returns to scale, or to both.