Determinants of Entry in the Deregulated German Interurban Bus Industry

Two years after the deregulation of the German interurban bus industry in January 2013, two new entrants emerged as industry leaders: MeinFernbus (MFB) and FlixBus (FB). We use a comprehensive route-level data set to investigate the determinants of route entry for both providers. Applying survival models, we find that both companies show an increased probability to enter populous routes with large shares of young inhabitants; however, they both avoid entries into routes with low-quality rail connection as well as cities located farther away from the next motorway. Furthermore, both industry leaders largely refrain from entering small- and medium-sized routes in which the other provider is already operating. In large markets, however, they both show an increased entry probability independent of the presence of the other provider.

Dürr, Niklas and Kai Hüschelrath (2018), Determinants of Entry in the Deregulated German Interurban Bus Industry, Industrial and Corporate Change 27(3) , 467-488