THE THEORY OF "TWO-SIDED MARKETS" AND ITS IMPLICATIONS FOR FINANCING SEAPORT INFRASTRUCTURE: THE CASE OF GERMANY

The following paper focuses shortly on the financing regime for seaports in Germany and discusses that the status quo gives rise to substantial inefficiencies for not factoring in the positive externalities resulting from port operation. We will address this problem by combining two theoretical approaches in the discussion which were rather neglected in the debate about subsidies in the port sector: the theory of two-sided markets and the theory of interjurisdictional competition. First, the paper holds that, unlike the conventional literature on multi-product firms, the theory of two-sided markets provides for a realistic understanding of the highly complex economics of seaport operations (infrastructure provider, terminal operators, shipping companies, service provider etc.) and specific setting of taxes and charges. From our view it must be combined with the knowledge from theory of interjurisdictional competition for realistic economic policy recommendations and in addition a better antitrust policy.