Bus and other road-bound services like tram and light railway are the backbone of the German local public transport sector. Based on the characterization of high deficits and fragmentation, five main research questions and hypotheses are investigated in this dissertation. First, advanced Stochastic Frontier models which account for unobserved heterogeneity and heterogeneous output variables are used to study cost efficiency and its determinants such as the vehicle utilization rate. Second, economies of scale and scope are evaluated. Third, based on the finding of substantial economies of scale, potential gains from hypothetical mergers are calculated using Data Envelopment Analysis. Fourth, I focus on competitive tendering, another option to increase efficiency in this sector. Analyzing operator changes, I find in majority regional bus services tendered out and structural conditions significantly increasing the probability for operator changes, like tendering in bigger volumes. Fifth, internal and external cost advantages for express coach services as a diversification option for public transport are confirmed. In conclusion, the results of my research are relevant to the strategic decision process of firm management as well as regulators.

Bus and other road-bound services like tram and light railway are the backbone of the German local public transport sector. Based on the characterization of high deficits and fragmentation, five main research questions and hypotheses are investigated in this dissertation. First, advanced Stochastic Frontier models which account for unobserved heterogeneity and heterogeneous output variables are used to study cost efficiency and its determinants such as the vehicle utilization rate. Second, economies of scale and scope are evaluated. Third, based on the finding of substantial economies of scale, potential gains from hypothetical mergers are calculated using Data Envelopment Analysis. Fourth, I focus on competitive tendering, another option to increase efficiency in this sector. Analyzing operator changes, I find in majority regional bus services tendered out and structural conditions significantly increasing the probability for operator changes, like tendering in bigger volumes. Fifth, internal and external cost advantages for express coach services as a diversification option for public transport are confirmed. In conclusion, the results of my research are relevant to the strategic decision process of firm management as well as regulators.