Tag Archives: Poland

Social Entrepreneurs’ Responses to the Refugee Crisis in Jordan and Lebanon (report FEM44-12)

30Following the outbreak of the civil war in Syria in 2011, an estimated 1.5 million and 1.3 million Syrian refugees sought a safe haven in Lebanon and Jordan respectively (Reuters, 2017; Ghazal, 2017). Considering that the population of Jordan is just under 10 million, and that of Lebanon – under 7 million (World Bank, 2018), this sudden and unexpected flow of refugees resulted in severe disruption, stretching the absorptive capacities of the two countries well beyond their limits, and necessitating massive relief efforts for refugees and host communities alike. In their efforts to manage the situation, the authorities in both countries have been supported by international community and civil society. Increasingly, private sector has been stepping in as well (Berfond et al., 2019). Among many institutions and individuals aiming to alleviate the situation, an increasing number of less traditional actors – social entrepreneurs – could be also observed.

Against this background, the main of this exploratory study was to explore the ways in which social entrepreneurs in Jordan and Lebanon have been helping to alleviate the refugee crisis in both countries. In our conceptualization of social enterprises (SEs), we followed an approach by Cerritelli et al. (2016), and instead of adopting a single definition of social entrepreneurship, understood SEs as entities possessing the following characteristics: i) primarily focus on the creation of social value rather than a purely economic one, ii) being financially sustainable or aiming at achieving that goal, and iii) self-identifying as a social enterprise. This approach was more inclusive of different types of socially entrepreneurial initiatives, additionally allowing for any differences that may occur between SEs based in the western countries and MENA region (as suggested, e.g. by Tauber, upcoming).

Our main finding, developed based on extensive literature review and stakeholder consultations (29 interviews with SEs and support organizations, a focus group, and a panel discussion during a workshop), is that although social entrepreneurs overcome numerous obstacles in order to achieve their goals, assessment of the real impact of their actions is not possible due lack of social impact measurement mechanisms in place. Judging their success is also impeded by the fact that the majority of the SEs examined is relatively young, being predominantly established within the past five years.

At the same time, we found that the anecdotal evidence does suggest that refugees in both countries benefit from the actions of social enterprises in a number of ways. Most notably, SEs are a source of employment opportunities, helping refugees to start new careers or resume the ones they had back in their home countries. The opportunities offered are especially valuable for female refugees, struggling to manage family-related responsibilities with work-life and facing various constraints of socio-cultural nature. SEs are uniquely positioned to assist with the labour market integration of the refuges as – unlike purely profit-oriented private companies – they can accommodate for their specific needs, focusing on the social impact of their work rather than just profit maximization (e.g. by providing free childcare for their female employees). Moreover, unlike non-profits, they can create sustainable jobs that do not (entirely) depend on donor funding. Unfortunately, ultimately the degree to which the SEs succeed in their work to large degree depends on the labour market policies of their respective governments. The issue of granting work permits to the refugees is incredibly sensitive in Jordan and Lebanon, both struggling with high unemployment rates among the native population. Recently, especially the latter has been introducing measures that may prove extremely difficult to overcome for the SEs wishing to integrate the refugees to the local labour markets.

Another group of the SEs has been focusing on providing goods and services that would facilitate the everyday existence of the refugees (and other segments of the population): from providing innovative educational solutions, through developing sanitary provisions, to designing functional temporary shelters. They, too, have however been adversely affected by existing regulatory frameworks.

Overall, the SEs face various challenges related to bureaucracy and inadequate legislation, such as high taxes, complicated customs procedures, red tape, or overregulation. Importantly, lack of legal recognition of a social enterprise as a legal entity is a major impediment, forcing social entrepreneurs to choose between registering as i) for-profits and therefore forfeiting any tax deductions, opportunity to receive (tax-exempted) grants and donations, and other benefits that non-profit organizations benefit from, or i) non-profits, limiting their opportunity to generate income. Equally worryingly, the complexities of the existing legislation do not seem to be well understood by SEs and support organizations (SOs) alike.

Another major obstacle identified by the vast majority of interviewees was securing funding to develop and grow. With bank loans and microcredits were out of scope or out of the question, most of the SEs turned to grants – and personal savings – even if finding an investor was the preferable way of going forward.

Finally, lack of adequate assistance on behalf of the support organizations was an additional factor adversely affecting the SEs, who complained that incubation and acceleration schemes available were not tailored enough and imposed unnecessary constraints on their daily operations. While some SOs did acknowledge this problem, many saw social entrepreneurs as cavalier and unwilling to learn.

The social entrepreneurship ecosystem in Jordan and Lebanon, especially its segment working with refugees, is still relatively undeveloped, unstructured, and unorganized. However, it is quite clear that the potential to have a positive impact on the livelihood of refugees residing in both countries is real. While social entrepreneurship alone by no means the answer to the refugee crisis, in a conducive legislative environment it may become an important actor – especially thanks to the new technologies that allow the SEs to scale up their activities and potentially maximize their impacts.

FEMISE MedBRIEF 27: “Social Entrepreneurship to Alleviate Refugee Crisis in Jordan and Lebanon”

Katarzyna Sidlo

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region.The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

The FEMISE MED Brief “Potential of Social Entrepreneurship to Alleviate Refugee Crisis in Jordan and Lebanon” is available here.




In the face of an ongoing refugee crisis in Syria, the private sector has been increasingly involved in the quest to alleviate the situation. The present policy brief discusses the potential of one particular group of businesspeople, social entrepreneurs, to help relieve the situation of hundreds of thousands displaced persons who found refuge in Jordan and Lebanon.

The list of FEMISE MED BRIEFS is available here.

The policy brief has been produced with the financial assistance of the European Union within the context of the FEMISE program. The contents of this document are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union

FEMISE and Institut de la Méditerranée at COP24 (Katowice, Poland) !


Socio-Economic intricacies related to Climate Change Towards an EU-Med research agenda and actions (Proceedings of COP24 Workshop)

On the 12th of December 2018, the second side-event co-organized by Union for the Mediterranean, FEMISE, Institut de la Méditerranée, and Energies2050 took place during Cop24 at Katowice, Poland. Entitled “Socio-Economic intricacies related to Climate Change towards an EU-Med research agenda and actions“, this round table was particularly rich in discussions around the role of research in Climate Action in general and on the role of collaboration between stakeholders in order to instigate social change.

Indeed, Jorge Borrego, UfM Senior Deputy Secretary General, Energy Climate Action, Higher Education and Research stated that “a continuous and coordinated action between stakeholders and experts is the key to optimize the fight against climate change”. In order to ask all the relevant questions and provide innovative and forward thinking solutions to local and regional structural obstacles, the Deputy Secretary General highlighted the need to bring together the different approaches to the issues of sustainable development, in general and climate change initiatives, in particular. Jorge Borrego added that the UfM’s approach to climate action is to work with the 5 key actors of climate change negotiations in the South Med, namely the people, the governments and subnational authorities, the private sector actors, the research institutes and experts, and the local, regional and Euro-Med NGOs. As Jorge Borrego said: “It is essential to talk with people and not only about them”.

COP24, Katowice, Pologne, pavillon ENERGIES2050

One of the latest collaborations of UfM is with MEDECC, a Marseille-based network of experts to support decision-making. Joël Guiot, MEDECC expert, participated to the workshop where he presented the role of MEDECC as an essential scientific platform for informing all relevant stakeholders of the newest updates concerning climate change. In order to prepare for improved assessments and a comprehensive synthesis of global change knowledge in the Mediterranean region, he stressed the need to have networks of scientists working towards a regional science-policy interface for climatic and other environmental changes across the Mediterranean. Joël Guiot also announced the latest UfM-funded report that MEDECC is preparing which aims both at identifying gaps in the current research on climate change and its impacts in the Mediterranean and to provide concrete solutions to locals and decision makers in the Southern and Eastern Mediterranean Countries.

Jorge Borrego (UfM), Constantin Tsakas (IM, FEMISE)

On the other hand, all panelists stressed on the importance of establishing reliable monitoring and reporting mechanisms. The South Med region lacks data on environmental issues making this a priority in the region. Constantin Tsakas, General Manager of Institut de la Méditerranée and General Secretary of FEMISE, highlighted the need for a Mediterranean data observatory that would gather robust data on environmental issues in the South Med region, which could be made available publically allowing to remove gaps and to enhance research and policy-making. He also highlighted the fact that environmental questions must be treated in a transversal thematic approach. Researchers and policy makers should consider environmental issues, climate change and the transition towards renewable energies not only as isolated priorities but mostly as transversal issues that influence and are influenced by sectors such as agriculture, energy, urbanism, etc.

Joël Guiot (MEDECC), Stéphane Pouffary (ENERGIES2050, Jorge Borrego (UfM)

Meanwhile, Stéphane Pouffary, Executive Director of ENERGIES 2050 stressed on the importance of knowledge sharing and of building concrete collaboration mechanisms between the territories of the Euro-Med region. He presented the 2018 edition of the ENERGIES2050/FEMISE/Institut de la Mediterranee report entitled “The challenges of climate change in the Mediterranean”. This report is a flagship report discussing climate change matters and the different implications of global warming and climate deregulation in the region. “Scientists need to demonstrate opportunities by transforming constraints into potential investments and this role is possible because of the existence of a review process that is transparent and consistent” stated Stéphane Pouffary. He also stressed on the need for reliable data to provide policy makers with relevant recommendations that answer the needs of locals.

Constantin Tsakas (IM, FEMISE), Karolina Zubel (CASE), Abeer Elshenawy (American University in Cairo)

This panel also included sector-specific experts among which Karolina Zubel, Energy and Climate policies Analyst at polish think-tank CASE (FEMISE member), presenting the EUROPACE project that CASE coordinates. This initiative is a financing mechanism that aims to unlock the potential for deployment of energy saving and generation technologies to European households. In practice, EuroPACE is a form of on-tax financing building upon an existing relationship municipalities have with their citizens – the property tax system. On-tax financing is a type of financing mechanism used to collect the repayment for money that was lent for investments in building improvements that meet a ‘valid public purpose’. She added that the need for buildings that are more sustainable is shared on both the north and south of the Mediterranean and that their renovation needs to be more accessible and affordable. The potential for replication of EUROPACE in the South Med is considerable. In Morocco, for instance, the legal framework includes two potential tracks for implementation of EUROPACE including both local taxes and potential for closure measures. Moreover, the municipalities being active stakeholders of the climate action makes implementation channels adequate for local level replication.

Abeer Elshennawy, FEMISE researcher from the American University of Cairo concluded on the implications of an EU-Med research agenda on Climate Change showing the potentials of including the environmental issues into bilateral and multilateral trade agreements both for economic growth and climate action. Agriculture and Trade were the two main sectors that were stressed as particularly important for climate action in the South Med region, in general and in the Egyptian context, in particular. In order to provide concrete solutions for the current challenges we need to collaborate both with actors of the Middle East North Africa region and the European partners, stressed Abeer Elshennawy.

Panelists at the COP24 workshop by Union for the Mediterranean, IM, FEMISE and ENERGIES2050

The Deputy Secretary General of UfM agreed on the importance of Trade Integration as a priority theme in the South Med region, for climate action and in general to foster more partnership. He stressed how a 2012 UfM report on Trade Integration, carried out by FEMISE researchers Patricia Augier and Jean-Louis Reiffers, showed that 90% of trade within the EU was trade between EU countries, 9% corresponded to trade between the EU and the 15 partner countries, while trade between UfM partner countries represented only 1% of the total.

In conclusion, all panelists agreed on the importance of including all initiatives for climate action in a dynamic dialogue between stakeholders that is evolutive and gives a voice to policy stakeholders.

Make sure to also check our “IM-FEMISE COP24 Video Interviews”, conducted on the occasion of the events at Pavillon ENERGIES 2050 (11/12/2018 and 12/12/2018), organized by Institut de la Méditerranée (IM) , FEMISE, ENERGIES 2050 and the Union for the Mediterranean.


The involvement of sub-national Euro-Mediterranean governments in the fight against climate change (Proceedings of COP24 Workshop)

COP24, Katowice, Pologne, pavillon ENERGIES2050

On December 11 2018, during the 24th annual conference (COP24) on the fight against climate change (Katowice, Poland), a side event was organized jointly by the Union for the Mediterranean, Institut de la Méditerranée, FEMISE and ENERGIES2050 on the theme of “The involvement of sub-national Euro-Mediterranean governments in the fight against climate change”

This workshop brought together a panel of climate specialists, economists and political representatives to discuss the new report “Euro-Med sub-national governments in the fight against climate change: a framework for action, an example of the SUD Provence-Alpes-Côte d’Azur Region and opportunities for cooperation on a Mediterranean scale “. This study proposes a photograph of the context, the potential and some examples of actions of the Mediterranean territories in the face of climate change.

Constantin Tsakas (General Manager IM, General Secretary FEMISE), Jorge Borrego (Deputy Secretary General UfM), Magnus Berntsson (President of the European Assembly of Regions)

As mentioned in the report, the European framework allows regions to put in place effective strategies for resilience and in the fight against climate change, agreed Magnus Berntsson, President of the European Assembly of Regions. Meanwhile, according to Jorge Borrego, UfM Deputy Secretary – Energy and Climate Action, it is really at the regional level that climate action can succeed. Regions are the real drivers of action to bring about change and ensure the sustainability of initiatives that mediate between public authorities and local people. The priorities for Territorial Cooperation on Climate and Energy in the South Med region therefore lie in the creation of an environment allowing the proliferation of climate initiatives within a joint and coordinated action between actors at different levels and in different sectors.

Stéphane Pouffary (ENERGIES2050) and Constantin TSAKAS (IM, FEMISE) presenting the IM/FEMISE/ENERGIES2050 study

“The SUD PACA region can serve as an example for other Mediterranean territories in order to capitalize on initiatives and share the experience of this region for a more effective fight”. Dr. Constantin Tsakas (General Manager of Institut de la Méditerranée, General Secretary of FEMISE), one of the publication editors of the study, described the usefulness of going back on the lessons that the case of the SUD region puts forward. A platform at the service of territories, offering the possibility to capitalize, to exchange, to train, to allow a dialogue with the world of regional statistics and to offer technical assistance, could be supported at the regional level. In addition, on the EU-Med level, private sector involvement could provide interesting answers. Among the proposed actions, the creation of an “ERASMUS of social and environmental entrepreneurship” to cultivate entrepreneurial skills with social and environmental impact especially with regards to young people.

Particular emphasis was placed on sharing and collaboration between the different stakeholders in climate action and resilience. Stéphane Pouffary, Director ENERGIES 2050 calls for “going beyond the fight against climate change to have a coordinated and positive struggle for well-being and sustainable development”. Moreover, as Magnus Berntsson pointed out, sustainable development and SDGs can not be detached from the NDCs and commitments of the Paris agreement. To treat them separately would be reductive and non-efficient. Thus, networking in the South of the Mediterranean would not only provide a better approach to the SDGs but would also have a positive impact on national climate commitments, a point shared by all panelists.

Panelists at the COP24 workshop by IM, FEMISE, Union for the Mediterranean and ENERGIES2050

To promote these climate initiatives and highlight the conditions for collaboration between the various stakeholders, it is essential to create a comprehensive legal incentive framework that supports private and public initiatives in their fight against climate change and capacity building of local societies. Jean-Charles Lardic, Director of Planning, City of Marseille, stressed the importance of providing a legal framework for Euro-Med cooperation, as the southern shore of the Mediterranean would greatly benefit from a rapprochement on the legal issues and legal framework for climate action.

The clarification of the legal frameworks for climate action in the South Med region would also make the region more attractive to foreign donors, thus providing more transparency and insurance for investments. Carlos de Freitas, Director of Programs, Global Fund for Cities Development, emphasized that to enable sustainable financing in the Mediterranean, expertise on climate issues needs to be strengthened at the state, general and territorial levels in particular.

Abeer ElShenway (American University in Cairo, FEMISE), Hajar Khamlichi (Mediterranean Youth Climate Network) and Arnault Graves (Union for the Mediterranean)

In addition, the role of young people from the South Mediterranean region was highlighted during the debates that ended the workshop. The intervention of Hajar Khamlichi, President of the Mediterranean Youth Climate Network, emphasized that young people carry innovative solutions and projects with socio-ecological sensitivity that would create a real virtuous circle for a structural change from within the local ecosystems. Hence the need to support them in their social entrepreneurship project, a topic that was discussed during the presentation of possible solutions suggested by the report and presented by Guillaume De Laboulaye, ENERGIES 2050 expert and FEMISE member.

The report is available at: https://www.femise.org/publications/rapport_thema/rapport-les-gouvernements-infranationaux-euro-med-dans-la-lutte-contre-le-changement-climatique/


COP24 : 3 questions to…Dr. Constantin Tsakas, General Manager of Institut de la Méditerranée – General Secretary of FEMISE

  1. Who are Institut de la Méditerranée and FEMISE?

Institut de la Méditerranée (IM, Marseille) is an institute of economics, founded in 1994 by the PACA Region, the General Council Bouches-du-Rhône, the City of Marseille City and the CCIMP. Its initial objective: to make Marseille a major center of reflection on the future of the Euro-Mediterranean zone by collaborating with Europe and the Southern Mediterranean countries. Therefore, IM produces research and actions to promote the development of the Mediterranean territories and to advance the Euro-Mediterranean territorial cooperation. This is also how IM and ERF (Economic Research Forum, Cairo) are co-founders and coordinators of FEMISE, a historic think-tank based in Marseille that brings together more than 100 research institutes from the North and South of the Mediterranean. FEMISE, funded in large part by the European Commission (DGNEAR) has a research agenda that revolves around four thematic axes: Trade Integration, Private Sector Development, Climate and Energy and finally Inclusiveness.

With our approach, which we consider as “Science for Policy” & “Science for Business”, we want to move towards inclusive and sustainable socio-economic development in the Euro-Mediterranean region. Through our research and multi-stakeholder dialogue, we are raising the awareness of state actors in the North and especially the South to the need to develop affordable and green energy by 2030 (SDG 7). In addition, our actions contribute to raising awareness on and acting for the implementation of other SDGs, in particular SDG9 “Industry, Innovation and Infrastructure” which is a key vector of economic growth and development. That is why we actively participate in THE NEXT SOCIETY project to support innovation in the Mediterranean. In addition, our actions respond to the issues of SDG10 “Inequalities Reduced”. Here, FEMISE and IM have undertaken an ambitious effort for the emergence of Social Entrepreneurship (ES) ecosystems, by associating the EU-MED cooperation communities with the main actors of social impact and support for entrepreneurship. We recently gathered some of these actors during a workshop, “Social Change Makers”, at the summit EMERGINGVALLEY2018 (Marseille, November 20, 2018).

  1. You stress that climate change is generating increased socio-economic complexifications in the Euro-Mediterranean region. What is the situation in the region and what answers do you hope to bring?

In the Mediterranean, climate change involves many risks for ecosystems and for the well-being of populations. The Mediterranean territories of Europe are the most vulnerable on the continent and the Mediterranean territories of the South and East of the basin are at the forefront at the world level. Therefore, we believe that it is first and foremost crucial to update and consolidate scientific knowledge on climate and environmental disturbances in the Mediterranean basin and to make them accessible to decision-makers, key stakeholders and citizens. That is why we are co-organizing a workshop with the Union for the Mediterranean and ENERGIES2050 (12 December 2018) which will allow to exchange between academics, practitioners and institutional representatives on ways to enrich the research program and the Euro-Med actions on climate change. By joining forces with the UfM, the reach of the messages for an impact on sustainable development in the Mediterranean can only be reinforced.

It should also be noted that the main challenges we encounter in the Mediterranean are i. the frequent absence of reliable data related to sustainable development and ii. limited interest in climate issues by the majority of public authorities in the South Bank. Thus in our strategy we wish to intensify our efforts on three axes:

  • By continuing to fund research on Sustainable Development (SD) and Inclusive Strategies to be followed in the Mediterranean and on issues related to Climate Change,
  • Contributing to the establishment of National Advocacy Panels in the South to act directly with policy makers,
  • Contributing to the development of a SD Data Observatory on the Mediterranean.

We favor an inclusive multi-stakeholder approach and call on all concerned to contribute to this common effort. Sharing of resources and common knowledge is essential. 

  1. With regard to knowledge sharing, you are presenting the study “Euro-Med Subnational Governments in the Fight Against Climate Change” at a second COP24 workshop. How does the SUD Provence-Alpes-Côte d’Azur region, illustrated in your report, offer examples for the EU-Med?

Indeed, another workshop, in collaboration with the same partners, will take place on December 11 and will present the study that the IM has carried in partnership with FEMISE and ENERGIES2050 on “The sub-national governments Euro-Med in the fight against climate change: Framework for action, example of the SUD Provence-Alpes-Côte d’Azur region and opportunities for cooperation on a Mediterranean scale “.

What we observe is that, globally, the action of communities, in France in general and in the SUD Region in particular, benefits from an incentive and coherent legal framework, which is supported by regional information systems provided, but also by the possibility of mobilizing many levers of European, national and regional funding. The communities of the SUD PACA Region have engaged in the implementation of integrated climate strategies in the form of PCET (Climate Territorial Energy Plans) and then PCAET (Climate Climate Air Energy Plans). Even if things still need improvement, the point of view that we defend in the study is that the SUD Region can therefore make a real contribution on the climate / territory issue in the cooperation strategy with the southern and Eastern Mediterranean territories.

Our reflections underline that the SUD PACA Region could bring valuable lessons and feedbacks, notably by bringing together the results of scientific research, decision-makers and the production of information and knowledge on local development / climate issues, which remains to be built in many countries. Moreover, a platform at the service of the territories in this area offering the possibility to capitalize, to exchange, to train, to allow a dialogue with the world of regional statistics and to offer technical assistance could be supported at the regional level, particularly through nascent initiatives such as the Mediterranean House of Climate.

Our study also emphasizes, more generally, on how the involvement of the private sector in EU-Med cooperation could provide interesting answers. Proposals for actions to be undertaken in the field of Euro-Mediterranean cooperation could include the creation of an “ERASMUS of social and environmental entrepreneurship” to cultivate entrepreneurial skills with social and environmental impact particularly with regard to the youth. Many other lines of thought are advanced in this study which was made available on December 7, 2018 on the FEMISE website.

Article in collaboration with ENERGIES2050 : http://energies2050.org/


FEMISE and INSTITUT DE LA MEDITERRANEE (IM) partners in a third COP24 workshop! (December 13, Katowice, Poland)

FEMISE and INSTITUT DE LA MEDITERRANEE (IM) are delighted to join the workshop “Legal Transition, a dynamic of change initiated by local actors to help meet climate challenges in a vision of sustainable development based on a “humanistic vision””, organized by the city of Marseille and Energies 2050. Are also partners Barreau de Marseille, the Friends of the Universal Declaration of Human Rights, Green Cross France and Territories.

After giving a brief insight into the prospective and humanistic vision of the sustainable city of tomorrow, the objective of the workshop is to explore the question of Legal Transition. The workshop will allow presenting and debating the first workings of the Mediterranean Commission for Prospective Reflection on the Legal Transition which undertook to draw-up an overview of the legal evolutions considered necessary by local actors. The workings draw from the Universal Declaration of Human Rights and from the need to give territories more freedom to develop horizontal approaches and create new synergies.

Dr Constantin Tsakas, General of Institut de la Méditerranée and General Secretary of FEMISE will speak on the theme of “New inclusive and sustainable models of local development, which require revisiting legal frameworks”.

The program of the workshop is available (in french) by clicking here.

07/12/2018 (UPDATE)

Report “Euro-Med sub-national governments in the fight against climate change”

INSTITUT DE LA MEDITERRANEE (IM), FEMISE and association ENERGIES2050, announce the publication of the final version of the report on Euro-Med sub-national governments in the fight against climate change: Framework for action, example of Région SUD Provence-Alpes-Côte d’Azur and opportunities for cooperation at the Mediterranean level “

This report, articulated in three chapters, offers a photograph of the initiatives and dynamics undertaken by Région SUD (France) in the fight against the effects of climate change and also fits within the framework of the great Euro-Mediterranean cooperation.

The report (in french) is available for download by clicking here.



FEMISE and UfM collaborate on two COP24 workshops ! (11 & 12 December, Katowice, Poland)

FEMISE and Institut de la Méditerranée are thrilled to announce their collaboration with the Union for the Mediterranean (UfM) and ENERGIES2050 (member of FEMISE) on two COP24 workshops (Katowice, Poland) !

The programmes for the two workshops (December 11th and 12th) are available   here (11/12)   and   here (12/12).

WORKSHOP  1 « The involvement of sub-national Euro-Mediterranean governments in the fight against climate change » (11/11/20118) In the face of climate change, Europe’s Mediterranean areas are among the most vulnerable in the continent, and the southern and eastern Mediterranean territories of the basin are also at the forefront. The impacts of climate change are already costly, both economically and socially, and call into question the attractiveness of territories while challenging the European objectives for regional cohesion and inclusive growth in the countries of the South Bank.

This round table live-broadcast will be the opportunity to formally present the IM / FEMISE / ENERGIES 2050 study on “The involvement of sub-national Euro-Mediterranean governments in the fight against climate change: a framework for action, an example of Region SUD-Provence Alpes Côte d’Azur and opportunities for cooperation on the Mediterranean scale “. After a presentation of the issues and challenges but also opportunities to act, multi-stakeholder discussions (with representatives of the UfM, the President of the Assembly of European Regions, FEMISE experts, etc.) will allow an in-depth dialogue on Euro-Med cooperation dynamics. It will also be necessary to situate local climate governance in the broader context of Europe and the Europe-Mediterranean-Africa axis.

WORKSHOP 2 “Socio-Economic intricacies related to Climate Change Towards an EU-Med research agenda and actions” (12/11/20118) : In the Mediterranean, climate change implies numerous risks for ecosystems and for human well-being. Therefore, it is crucial to update and consolidate the best scientific knowledge about climate and environmental perturbations in the Mediterranean basin and to make it accessible to policy-makers, key stakeholders and citizens. The objective of this Broadcasted RoundTable is to exchange between academics, practitioners and institutional representatives on ways to enrich the EU-Med research agenda and actions on climate change.

FEMISE MED BRIEF no8 : Women in the MENA labour market. Can collaborative economy be of help?

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region. The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

The eighth issue of MED BRIEF “Boosting female labour market participation rates in the MENA region : Can collaborative economy be of help? ”is available by clicking here.

Dr. Katarzyna Sidło, CASE (Center for Social and Economic Research), FEMISE

This policy brief evaluates the potential of collaborative economy for increasing labour force participation of women in the MENA (Middle East and North Africa) region. Specifically, it examines the ways in which the collaborative economy can enable joining labour market to those women who wish to do it, but for various practical (lack of jobs, difficult commutes), societal (restrictions on outside-of-the-house activities), or family (caring responsibilities) reasons had been unable to do so.


Also available in Arabic here.

The list of FEMISE MED BRIEFS is available here.

The policy brief has been produced with the financial assistance of the European Union within the context of the FEMISE program. The contents of this document are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union.

Facilitation of Transportation in Turkey and Poland: a Comparative Study

A close relationship exists between trade costs and exports as revealed by Samuelson
(1964) and Dornbush et al. (1977) within the framework of a version of the Ricardian
model of international trade. On the other hand, in the Melitz (2003) model, that
combines economies of scale at the firm level with productivity differences between
firms, and its numerous extensions, trade costs do play important roles. In all models of
‘new new trade theory’ trade costs affect the aggregate volume of international trade.
Since with increased liberalization a major component of trade costs turned out to be the
transport costs as shown by Hummels (1998) and Anderson and Wincoop (2004), the
transport costs are one of the major determinants of a country’s competitiveness, and thus
of its ability to participate in the world economy. Empirical models of Bougheas et al.
(1999) and Limao and Venables (2001) confirm this conclusion.

Important determinants of transport costs are distance, geography, infrastructure,
administrative barriers, and state of competition in the transport sector. In principle
governments can try to decrease the transport costs by improving poor transportation
infrastructure conditions, reducing administrative costs, and decreasing the inefficiencies
in transport services by liberalizing the transport sector and thus increasing competition
in the sector. Hence, the liberalization of transportation services sector is of crucial
importance for decreasing the trade costs of goods produced by various industries within
the manufacturing sector.

In this study we concentrate on the effects of changes in infrastructure and liberalization
in the transport sectors on the transport costs by focusing on the four sub-sectors of the
transport sector, namely road transportation, rail transportation, maritime transportation,
and air transportation. We focus on two economies – Poland and Turkey. Whereas
Poland is a New Member State of the European Union (EU), Turkey is a candidate
country of the EU.

The study consists of six chapters. In Chapter 1 we analyze besides the quality of
transport infrastructure the market structure in the four transportation sub-sectors in
Poland and Turkey. We note that trade liberalization in road transportation, rail
transportation, maritime transportation, and air transportation sectors requires the
harmonization of rules and regulations in the sectors with those of the major trading
partner, namely the EU. In addition, the liberalization requires the removal of any legal or
administrative provisions restricting market access and commercial presence. As a result
we concentrate in Chapters 2-5 on the analysis of regulatory frameworks in road, rail,
maritime and air transportation sectors as well as on the analysis of restrictions to market
access and commercial presence. Each chapter after studying the basic characteristics of
the related services considers the international regulatory regime, thereafter the rules and
regulations in the EU, and lastly those in Turkey and Poland. The chapters are intended to
show how far the four sub-sectors of the transportation sector in Poland and Turkey are
from trade liberalization with the EU. Finally, Chapter 6 studies the performance and characteristics of firms in transport sub-sectors in Poland and Turkey using firm level


In the past Poland, like many non-market economies in Central and Eastern Europe, had
relied on public transportation provided by large and public enterprises. The situation
changed dramatically in early 1990s, when a market for imported passenger cars was
created. The large state-owned enterprises were split and transformed into public or
private enterprises. The rail transport’s share of the modal split has decreased sharply. In
the freight transport market, rail’s share dropped from over 50 percent to just under 27
percent between 1995 and 2005. At the same time, the share of road transport increased
dramatically, compensating for the drop in railway transportation.
The increased demand for road transportation services and the surge of private traffic
revealed a considerable bottleneck in the previous infrastructure. Similarly, a larger
demand for air passenger transportation was constrained by both a limited number of
airports and their insufficient capacity. On the other hand, a drop of demand for railway
passenger and cargo services and underinvestment in maintenance and modernization of
the existing network reduced the competitiveness of the railway transport even further.
Not different was the case of the maritime sector, where two great weaknesses were
remoteness from the main oceanic traffic routes and the underdeveloped transport
connections with the main domestic business centers. Only recently some major
investments in motorways, airports and high-speed railway lines have been undertaken as
supported by EU structural funds. Hence, quality improvement in Polish transport
infrastructure can be expected in the following decades.

Turkey, in contrast to Poland, has been a market economy throughout the whole post-war
period and has been associated with the EU since the 1960s. The transport system in
Turkey relies essentially on road transportation, similar to Poland, while railway network
remains underdeveloped. Unlike in Poland, maritime transport plays an important role in
development of international trade in Turkey due to its geographic location between
Europe and Asia and the length of the coastline. Therefore, it is not surprising that over
50 percent of the quantity and 75 percent of the value of goods exported by Turkey are
transported over water. In air transportation after the withdrawal of government from
commercial activities starting in 1986, Turkey experienced a tremendous development in
civil aviation sector. Turkey’s transport sector has been growing not only in terms of its
size but also in terms of quality of the network. According to the quality indexes for
transport infrastructure such as those of World Competitiveness Report and World
Bank’s Logistics Performance Index, Turkey ranks above Poland.
Despite recent improvements, Turkey’s infrastructure size and quality still lag behind
other OECD and EU countries. There is need for improvement in the infrastructure
especially in railroads and ports. It is emphasized that by improving the transport
infrastructure Turkey could help to reduce regional disparities. Improved transport size
and quality will not only support international trade but also facilitate increased productivity and competitiveness of the Turkish products. The Turkish Government
recognizing the needs in the sector has set ambitious targets for 2023, the 100th
anniversary of the establishment of the Republic of Turkey, in the new transport strategy
document.1 The document advocates a modal shift between roads and railways. In the
new strategy, the Government’s target is to increase the share of railways from 4.76
percent to 15 percent in freight transportation and from 2.22 percent to 10 percent in
passenger transportation by 2023. These targets require a reduction in the share of road
transport from 80.66 percent to 60 percent in freight and from 89.59 percent to 72 percent
in passenger transportation. The Government announced plans to expand highways by
three times, from 2,250 km to 7,500 km, and almost double the length of divided roads by
the end of 2023. Similarly, the plan more than doubles the railway infrastructure capacity
by 2023.

Chapter 2 concentrating on road freight transportation reveals that the liberalization of
road freight transport services is a daunting task as shown by the experience of the EU.
The liberalization of road freight transport services requires harmonization of rules and
regulations in the road transport sector among the Member and Candidate Countries, and
strict implementation of these rules and regulations, which concern market access and
competition, pricing and fiscal conditions, social conditions, technical conditions, and
road safety. In addition the EU states that the infrastructure should be accessible to all
current and potential service providers on a non-discriminatory basis, and road
infrastructure as a whole should be sufficient. Specific prescriptions for modernization
and efficiency of border crossing points for customs procedures are provided.
The EU has taken major steps in strictly implementing the road freight acquis, but
problems remain in the field of tax harmonization among Member Countries, also due to
different interpretations of the rules on vehicle standards and drivers’ working conditions.
Although the EU sets minimum and maximum taxation thresholds, taxation of fuels and
charges for infrastructure vary considerably among Member Countries. Similar
considerations apply to drivers’ working conditions. There may also be lack of
confidence in the ability or the will of the Member States to enforce the harmonized rules
and regulations. To avoid problems in this area there is a need for harmonization of
inspection practices among the Member Countries. One case where the EU has failed to
create a single road freight transportation market is the road cabotage. Although cabotage
was liberalized in 1993 with the adoption of Council Regulation 3118/93, it was not
possible to overcome the protectionist leanings within the Community. Several countries
tried to restrict cabotage by interpreting temporary basis on their liking. At the end the
Commission adopted the Regulation 1072/2009. Article 8 of that Regulation states that
every haulier is entitled to perform up to three cabotage operations within a seven day
period starting the day after the unloading of the international transport.
In the case of Poland we note that the liberalization of Polish freight transport sector is
driven mainly by the changes in the EU regulations that are subsequently harmonized into the Polish law. The recent changes in the EU regulations concerning market access,
cabotage and community licences are currently being introduced into national legal
framework, in particular the Law of Transport. While the national legislation is currently
being updated, the EU law applies and it carried out through decisions of the minister
relevant to transport.
On the other hand, Turkey has started the process of adopting and implementing the
legislative, regulatory and institutional framework of the EU road freight transport sector.
It has adopted large number of EU rules and regulations in road freight transport sector
concerning market access and competition, pricing and fiscal conditions, social
conditions, technical conditions, and road safety. The country by changing the regulatory
regime aims to increase competition in the sector, and also increase access to the EU road
freight transportation market. But as in the case of Poland, major problems are faced in
the implementation of these rules as well as with the improvement of infrastructure in

In chapter 3 we consider the rail transport sector. In the EU liberalization efforts started
during the 1990s. The main objectives of the rail reforms introduced in Europe were: (i)
to improve competition; (ii) to create more and better integrated international freight rail
services; (iii) to improve the efficient use of infrastructure capacity; (iv) to facilitate the
creation of a single European rail space; and (v) to reduce the declining modal share of
railways. The first reform package started with directives issued in 1991, 1995 and 1996.
The Second Railway Package adopted in 2004 provided a framework for further
liberalization of the freight market and harmonization of the regulation of safety and
technical standards across the EU. The third package introduced in 2007 granted the right
of access to the infrastructure in all Member States, introduced a European driver license
allowing train drivers to circulate on the entire European network and defined passengers’
rights and obligations that ensure basic rights for passengers in such areas as insurance,
ticketing, and passengers with reduced mobility.
Although over the last two decades the EU managed to build a good basis for a genuine
single market for railway transportation, the Commission of European Communities
(2010) points out that a single European railway area based on an integrated
infrastructure network still is not established. The Regulation No 913/2010 on European
network for competitive freight is aiming at the development of European rail network
for competitive freight by establishing rules for the creation and organization of
international rail corridors for competitive rail freight.
During the last two decades Poland has made significant progress in opening-up its
railway market to domestic and foreign competition. This progress can be illustrated by a
relatively high ranking of Poland among EU states, as expressed using rail liberalization
indices reported by IBM Business Consulting Services (2011). Progress was made in
terms of legal liberalization, measured by the LEX index and in real opening of the
market (ACCESS index). The increased competition is especially pronounced in freight transports. By now several foreign Railway Undertaking started their operations and
gained important shares of Poland’s market. In the case of passenger transport the
increased competition is mainly among domestic firms.
Despite the progress in the access liberalization the share of railways in Poland is
gradually decreasing in the intermodal split. The major challenge is the necessity to
modernize Polish railway infrastructure. Until 2008 the level of infrastructure
investments was very low by standards of old EU states. The situation is improving since
2009, when substantial amounts of public investments with the support from the
European structural funds have been spent on railway infrastructure and rolling stock.
Another major challenge is to ensure the interoperability of the Polish network with the
Trans-European network of high speed lines, as well as the interoperability of the Trans-
European conventional railway system.
The rail industry in Turkey is dominated by Turkish National Railways (TCDD) which is
a state owned, vertically integrated company that not only deals with provision of
infrastructure, but also with the supply of both freight and passenger services. It is
responsible for operating and renewing railways, ports, and piers; guiding and
coordinating affiliated companies; and carrying out complementary activities regarding
rail transport such as land transport that includes ferry operations. In 2005, a project was
launched by the TCDD to open the railway market, to establish the legislative framework
in accordance with the EU acquis and to re-structure the TCDD. In the new
organizational structure for the rail sector, TCDD would become the infrastructure
manager, continuing to operate as a public enterprise. The rolling stock, tracks, track
components, and signaling will be under the supervision of TCDD. In addition, a new
joint stock company, Turkish Railway Transportation Corporation, will be created as a
rail undertaking, providing passenger and freight rail services as a subsidiary of TCDD.
The future plans for the Turkish railway sector include among others the strengthening of
the administrative capacity in regard to safety and interoperability, analyzing current
railway safety rules for gap analysis, examining Technical Specifications for
Interoperability for preparing National Safety Rules, training the staff about
interoperability, establishing a safety unit at TCDD, and preparing a Safety Management
System. The existing Railway safety rules are to be rearranged.

In chapter 4 we analyze the maritime transport sector. Since maritime transport is
inherently international in character, and vessels on most voyages must operate under the
regulatory requirements of many jurisdictions, there is an inherent need for
harmonization across countries. Countries need to harmonize their own rules and
regulations to international rules and regulations, which are classified as (i) regulations
related to commercial operations and practices and (ii) regulations related to safety and
environmental regulations. Compared to international rules and regulations the EU rules
and regulations in the maritime sector are generally much stricter.
The process of adjusting Polish regulations, in terms of maritime transport, to EU’s
legislation required many novelizations. In order to provide the legal and institutional
conditions for the application of the principle of freedom of establishment Poland has
introduced the novelized Act of Economic Activity, abolishing the business license
requirement for foreign entities willing to conduct business in maritime transport.
The competitive position of European merchant fleet is affected by state subsidies. The
guidelines on State aid to maritime transport were updated in 2004 (2004/C 13/03), and
include a whole list of possible privileges which can be implemented in order to
encourage the ship owners to return to European flags. They include inter alia: (i)
replacement of income tax by flat rate tonnage taxation system (which depends on the
total volume of transport instead of the financial outcome of the ship owner), (ii)
reduction or elimination of social security contributions for seafarers (iii) reduction or
elimination of other social benefit payments incurred by the shipowners and (iv)
reimbursement of expenditures incurred on upgrading skills of seamen.
The accession to the EU forced Poland to follow European standards on maritime safety
and security. Poland became a member of the European Maritime Safety Agency
(EMSA). Ships flying the Member Country’s flags are subject to frequent inspections,
though the frequency depends on the assigned risk profile. Poland has signed all 19 of
ILO conventions concerning seafarers, 2 concerning fishermen and 2 concerning
dockworkers. On March 18, 2009 Poland adopted the Polish Maritime Policy in 2020.
The document establishes the basis for Polish maritime policy, to implemented in
accordance with the guidelines presented in “An Integrated Maritime Policy for the
European Union”.

On the other hand, in the case of Turkey we note that Turkey does not associate itself
with the OECD Common Shipping Principles and has a reservation on Note 1 of the
OECD Code of Liberalization of Current Invisible Operations. Turkey has signed the UN
Liner Code but has not ratified it yet. It has no laws and regulations governing the
operation of liner conferences. Turkey has signed some of the international maritime
conventions. Regarding regulations on safety and the environment, we note that Turkey is
one of the 38 states that have not signed the “The United Nations Convention on the Law
of the Sea” (UNCLOS). The country signed only 12 of the ILO conventions concerning
seafarers and dockworkers. Turkey is a signatory to many of the IMO rules and
regulations. According to the European Commission (2011), ship sourced emissions,
maritime emergency response, reception of waste from ships, and handling of dangerous
goods in Turkey are areas that call for closer scrutiny.
Turkish regulations until 1983 required that all imports of public enterprises and public
entities be transported by Turkish-flag vessels. This restrictive policy was liberalised in
1983 by Decree 152, which stipulates that all imports for the account of public entities
are to be carried on board Turkish-flag vessels if the freight rate is not more than 10
percent higher than that quoted by foreign operators. On the other hand, according to the
Cabotage Act, cabotage is reserved to national flag carriers, and maritime transport among Turkish ports is assigned to Turkish ships only. Furthermore, towage, pilotage,
and other services related to ports are executed only by Turkish ships.
Turkey is in the process of adopting and implementing the legislative, regulatory and
institutional framework of the EU maritime freight transport sector. The country by
changing the regulatory regime aims in the long run to increase competition in the sector,
and gain market access to the EU market. In December 2003, Turkey adopted an
ambitious five-year Maritime Transport Action Plan for the enhancement of maritime
safety. This action plan sets out a road map for legislative alignment with the acquis on
maritime safety, measures aimed at strengthening administrative structures (in the area of
flag State and port State control) and training and equipment needs.

In chapter 5 we consider the air transport sector. Economic liberalization of air transport
services means not only liberalization of passengers and freight transport by aircraft, but
also liberalization of ancillary services such as air traffic control services, airport
services, aircraft repair, computer reservation systems (CRS), ground handling, and
aircraft repair and maintenance services subject to the condition that minimal safety,
security and environmental consideration are secured. Since air transport is inherently
international in character, and carriers must operate under the regulatory requirements of
many jurisdictions, there is need for harmonization of rules and regulations across

In the EU liberalization of air transport services started in 1987, and with the adoption of
three EU liberalization packages the air services market in the EU has been completely
reshaped to provide tighter competition, more efficient use of infrastructure and more
benefits to consumers. With the third liberalization package regulations regarding
licenses to air carriers, access for air carriers to intra-Community air routes, and fares and
rates for air services was supplemented by the Regulation No 1008/2008 on common
rules for the operation of air services. The 2008 regulations liberalized and standardized
terms of the granting of licenses to carry out air transportation services and strengthened
the supervision of the national authorities, introduced a complete freedom to set fares by
carriers and regulations on the code-sharing operations. Hence, the new regulation
increased the freedom of operation, while tightening the rules on finance and tariff

The accession of Poland to the EU and the liberalization of the market legislation
changed completely the legal environment in Poland. The major change was the creation
of the national Civil Aviation Office (CAO) being the aviation supervision authority and
responsible for the implementation of the EU regulations. The CAO is responsible inter
alia for registers of aircraft, aerodromes, aviation ground facilities, flight safety,
examination of safety levels in civil aviation, and general application of civil aviation
regulations. Poland has implemented the core elements of the Single European Sky
legislation. At the time of Poland’s accession to the EU aviation market was open to
competition between airlines and airports.
The Polish Aviation Law, as amended in 2006, defines public airport for commercial
flights. The management of the airport for public use requires a license. Detailed
regulations describe precisely the conditions for setting up and operating public airports.
Before the accession to EU only two airport management companies received permits
and the end of 2010 there were already ten entities that have permission to manage
public use airports.

In Poland the provision of air services is conditioned upon obtaining a license to operate
in air flights. The Aviation Law is implementing legislation and Council Regulation
(EEC) No. 2407/92 on licensing of air carriers. The access rules for carriers to routes
within the EU, in turn, were defined in Council Regulation (EEC) No 2408/92. In the
years 2004 – 2011 there have been major changes in the number of entities with permits
and licenses to perform aviation activities. Since the Polish accession to the EU, the
number of domestic entities that have a license to operate in the field of air transport has
significantly increased. Also, the number of foreign (EC) air carriers operating in Poland
increased dramatically. In consequence the Polish market became attractive not only for
the “traditional” European carriers, but also for the low-cost carriers. In 2002-2003, in
Poland, there were 28-30 airlines offering their services. In subsequent years, some of the
airlines left the Polish market, but there are also new firms entering the market. In the
pre-crisis peak year – 2008, 46 aircraft carriers operated in the Polish market. The rapid
increase in passenger traffic has been observed after Poland’s accession to the EU. In
2011, the Polish airports handled a total of 21.7 million commercial traffic passengers, an
increase of 6.1 percent compared to the previous year.
In Turkey private air carriers could be established with the enactment of Law No. 2920
on Civil Aviation in 1983. Air carriers for domestic or international ‘scheduled’ flights
are authorized to provide services if they are registered in Turkey and operate a minimum
of five registered aircraft with at least 100 seats. However, aircrafts can be leased and
there is no requirement of ownership. In 2001 as the Turkish aviation sector was
undergoing liberalization an amendment to the Turkish Civil Aviation Code was adopted
allowing air carriers to set airfares without the approval of the Ministry of Transportation.
When setting the tariffs, airline operators should obtain the approval of the Ministry in
advance, and they are under the obligation to advertise new tariffs at least 3 days before
they are implemented. Thus, the government since 2001 no longer intervenes in the
pricing of non-scheduled or air taxi services. In 2004 some Turkish air carriers started
scheduled domestic flights including to and from Istanbul, contributing to the end of the
State-owned operator’s de facto monopoly in the domestic scheduled flights.
Turkey is a member of the International Civil Aviation Organization (ICAO), European
Civil Aviation Conference (ECAC), European Organization for the Safety of Air
Navigation (EUROCONTROL), Joint Aviation Authority (JAA), and it is party to a large
number of international conventions such as the Chicago Convention. Safety regulations
for civil aviation has its legal basis through (i) the organization and functions of the
Ministry of Transportation, Maritime Affairs and Communications (MTMAC), (ii)
Turkish Civil Aviation Law, (iii) Law on the Organization and the Duties of the General Directorate of Civil Aviation (DGCA), (iv) the Chicago Convention, and (v) the

Air carriers operating international scheduled services to Turkey are authorized on the
basis of reciprocity within the framework of bilateral agreements. Charter services are
authorized on the basis of reciprocity under the rules of the European Civil Aviation
Commission (ECAC), of which Turkey is a member. Cargo transport is under the
provisions of Law No. 2920 and relevant articles of the Regulation on Commercial Air
Transport Operations, as well as the applicable provisions of bilateral air transport
agreements signed by Turkey. Turkey has signed bilateral air transport agreements with
122 partners. Under these agreements, Turkish carriers are operating scheduled services
to 175 cities abroad. Some of these agreements restrict market access to the signatory
states’ respective national carriers. A legal duopoly has therefore been created for the
specific international routes covered by these Agreements. These restrictions benefit the
Turkish Airlines (THY) to the detriment of all the other domestic carriers who are
prevented from flying to the international destinations covered by these Agreements.
Although major steps have been taken in Turkey to liberalize the aviation sector since
2001, European Commission’s 2011 Regular Report on “Turkey’s Progress towards
Accession” maintains that the process is not complete. According to the report an EUTurkey
horizontal aviation agreement is at a final stage. Since Turkey is willing to be part
of the single European sky, a pre-accession strategy for the aviation sector has been
developed. The strategy covers a set of priority actions on human resources, environment,
market regulation and aviation safety that needs to taken by Turkey. Regarding air traffic
management the report notes that there are no developments concerning the exchange of
flight data and requirements for the application of a flight message transfer protocol used
for the purpose of notification, coordination and transfer of flights between air traffic
control units. Moreover, air traffic management according to the report is suffering from
a lack of regional cooperation. In addition, to align with the acquis in the area of air
safety, Turkey is expected to accept European Aviation Safety Agency (EASA) as the
competent body to carry out standardization inspections in the field of air traffic
management and air navigation services. Finally, the Report notes that further efforts are
needed in order to improve implementation on slot allocation, particularly as regards the
independence of the slot coordinator.

The final chapter of the study, namely Chapter 6, is devoted firm-level data analyses. In
the first stage we compare Polish firms active in transport industries to their counterparts
in other EU countries, and assess some most notable differences between the transport
industry and the rest of the economy. The results show that Polish firms in transportation
sector are usually larger than those in other EU countries, especially in the railway and
road transport sectors. An exception is air transportation where Polish firms are visibly
smaller. In terms of labor productivity, Polish firms are roughly six times less efficient in
comparison to firms from the old EU member states, whereas their efficacy is about three times higher in relation to those operating in other Central and Eastern European
The analysis of market characteristics of EU firms reveals that price cost margins (PCMs)
are – despite liberalization efforts – fairly stable in all transport sectors over the analyzed
ten years period. In the case of Poland, while competitive pressure in rail services is
rather low, inefficiencies in the major rail service providers result in poor financial
conditions of single enterprises. We also observe a strongly decreasing minimum
efficient scale (MES) along the whole period for EU airline firms. A number of low-cost
firms have benefited from lower technological barriers to entry and the competitive
pressure has risen considerably. On the other hand, the highest minimum efficient scale
was observed for railway companies, for which the fixed investment in infrastructure is
still very important and it can impede the entry of smaller firms.
The subsequent analysis of export performance, using ‘Business Environment and
Enterprise Performance Survey’ (BEEPS) data base elaborated by European Bank for
Reconstruction and Development (EBRD), demonstrated a number of similarities
between manufacturing and transportation sectors. Labour productivity has a relatively
robust, positive impact on probability of exporting, both in the case of manufacturing and
transportation services. In both cases quality certificates and introduction of new products
are among the factors that tend to increase to probability to export. Quality certificates
are meant to reduce information asymmetry and may facilitate trade, while introduction
of new products may be perceived as ways to gain new markets and increase market
share in existing markets. Contacts with foreign markets through imports do improve the
probability to export in both sectors. However, a number of important differences
between the manufacturing and transportation sectors can be identified. In particular,
larger manufacturing enterprises have a higher probability of exporting, while the result
does not hold for transport firms. This may stem from the fact that some of the large
transport companies in analyzed countries are not necessarily export oriented – as their
natural transport activity focus on the domestic market, which is the case in e.g. public
Human capital seems to be important for export activity of manufacturing firms; however
this result seems not to apply to transport firms. Firms in the manufacturing sector that
rely on internal funding tend to export less frequently but this result does not hold for the
transport firms. As far as institutional environment is concerned, higher crime rate
(robbery) is among factors that can be detrimental to exporting activity . Its negative
impact is not completely robust across analyzed samples, although it seems to have a
relatively significant negative impact in the case of Poland. On the other hand, while the
perceived corruption does not seem to negatively affect the exporting activity, it seems
that exporters in the transport sector tend to perceive more problems with corruption than
non-exporters. Similarly, while difficulties in obtaining permits do not generally affect
the probability of exporting, they do have a negative impact on exporting in the case of
the transport industry. This finding does not apply to Poland, where difficulties with
permits do not have a statistically significant impact on export activities.
In the last section of the chapter we investigate first the firm characteristics of Turkish
enterprises in different transportation sub-sectors, and turn thereafter to the analysis of
the determinants of export activity of Turkish transportation firms. The analysis revealed
that transportation service exports and imports are rather rare activities in transportation
sector. Regarding services trade we note that transportation sub-sectors are engaged more
in exporting and rarely in importing. Although the percentage of firms that engage in
trade of transportation services is rather low, those firms account for a large share of
economic activity. On the other hand, the results of the determinants of export activity
suggest that labor productivity is positively related to the probability of exporting.
Similarly as in other empirical studies, the firm size is positively related to the probability
of exporting. Moreover, the coefficient of large firm is greater than the coefficient of the
variable for medium firms, indicating vertical integration in transport service exports.
The estimated parameter on the capital-labor ratio is positive indicating that exporting
firms in Turkey are usually capital intensive. Furthermore, the empirical results suggest
that firms with foreign participation involve in export activity more than the domestic
To study the impact of competition on labor productivity we model labor productivity as
a function of capital intensity, exports, size of the firm, and competition variables such as
price-cost margins and mark-ups. Empirical results suggest that firms that are more
capital intensive have higher productivity. The coefficient of the size of the firm is
positive and significant indicating that larger firms are more productive. Furthermore,
firms that are involved in services trade are more productive, and firms that have foreign
ownership are also more productive. But the coefficient of price-cost margin and mark-up
variables turn out to be positive although the signs of these variables are expected to be
negative. This result may be due to the fact that liberalization within the domestic market
has been achieved in Turkish transportation sector, especially in road and air subsectors
during the 1980’s and 1990s. The empirical data used in the study do not cover this
period. On the other hand, external liberalization of the transportation sectors as
emphasized in Chapters 2-5 of our study is still in its initial stages. Since external
liberalization of transport services requires the adoption and implementation of the
legislative, regulatory and institutional framework of the main trading partner, namely
those of the EU, external liberalization will be achieved only over time. Hence, the data
do also not indicate the results of external liberalization. Finally, we note that the share
of firms engaged in foreign trade is very small.

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