In the evaluation of the models the Likelihood Ratio (LR) test suggests that Translog models are preferable to the Cobb-Douglas functional form (the parameter estimation
for all the considered models can be found in Appendix 1: Translog models, and Appendix 2: Cobb-Douglas models). When we compare net effect models and gross effect models, the latter are preferable for both Cobb-Douglas and Translog models, according to the LR test. The estimation results confirm that terminal type and operation type variables influence terminal efficiency directly rather than through the production technique. Moreover, we can conclude that Model 2.6 (Table 5) is the best performing
model. The parameter crane spacing has a negative sign in the Cobb-Douglas specification (Model 2.3) and a positive sign in the Translog model (Model 2.6). Crane spacing indicates the density of the container handling machines and reflects the usage of available space, where the higher the usage and the lower crane spacing is, the better; crane spacing also reflects the potential for extending handling capacity and thereby attracting future container traffic within a relatively short period of time. Translog allows for the calculation of interaction between variables, but Cobb-Douglas does not, so it is not clear whether the change of sign is due to the nature of the variable or to the choice of functional form. It is nevertheless reasonable to assume that both are significant and that the change of sign indicates that this variable requires more sophisticated modeling, which, however, is beyond the scope of this paper.