Analysis of Market Structure and Passenger Transportation Performance: Case Study of Nong Khai Custom House, Thai-Loas Friendship Bridge, Nong Khai Province Thanet Wattanakul 1* and Sakkarin Nonthapot 2 1 Assistant Professor , Head of Humanities and Applied Social Sciences Department, Lecturer of Economics, School of Economics, Khon Kaen University, Nong Khai Campus and Researcher, Indo-China Trade and Economy Research Division, Khon Kaen University, Thailand 2 Lecturer of Economics, School of Economics, Khon Kaen University, Nong Khai Campus, Thailand and Researcher, Indo-China Trade and Economy Research Division, Khon Kaen University, Thailand *Corresponding author: Thanet Wattanakul, Assistant Professor Ph. D, Head of Humanities and Applied Social Sciences Department, Lecturer of Economics, School of Economics, Khon Kaen University, Nong Khai Campus and Researcher, Indo-China Trade and Economy Research Division, Khon Kaen University, Thailand, Tel: 66832838855; E-mail: thanetwat@hotmail.com Received date: December 10, 2013, Accepted date: February 26, 2014, published date: March 10, 2014 Copyright: © 2014 Thanet Wattanakul. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Abstract This study aimed to examine the situation, general management and performance of the international private transportation services of passengers between Thailand and the Laos PDR at the Thai-Laos Friendship Bridge. Other objectives were to analyze the market structure, competition behavior and the results of passenger transportation industry’s performance. This study also aimed to propose policy recommendations in order to enhance efficiency and performance development. Both primary and secondary data were obtained by interviewing two entrepreneurs chosen by purposive sampling and analyzing monthly data obtained from related public and private organizations over the period July 2007 to June 2010. Entrepreneurs provided international bus services from cities within Thailand and the Lao PDR, regular shuttle buses at the bridge, and private hire vans and buses. The results showed two companies operating in an oligopolistic market structure. The performance of both companies is nearly the same. The efficiency index measurement utilized for both companies were the same; however the results were slightly different. The levels of technology application within both organizations were also similar. Policy recommendations for efficiency and performance development are as follows. Entrepreneurs should increase the frequency of services as well as the number and variety of vehicles available to passengers and each vehicle should run at full capacity. Improving the services to be more convenient in terms of the speed, safety and efficiency is also necessary. Keywords: Market Structure; Performance; Passenger Transportation DemandJEL: F15, F20, F23 Introduction Thailand and the Laos PDR have a very long border of 1,810 kilometers which has been involved with international economic transactions in terms of trade, investment, and tourism and passenger transportation over a long period. There are 36 custom check points allowing passenger transportation between the two countries. The transportation modes are by international bus, train and car private hire van. Currently there is international bus service from the Thai- Laos Friendship to the main cities in the northeastern region such as Udonthani and Khon Kaen. The trend of passenger transportation has recently increased because of the rise of tourists and investors as well as the supporting promotion policy of both countries for the passenger transportation business. The growth of this business can be attributed to the capacity of Nong Khai province with respect to tourist attractions and destinations, food, culture and natural environment. The attribution of demand solely to the asserted attributes of Nong Khai province is not only for business. There are other reasons for the demand for cross-border travel, including kinship links and travel to other parts of Thailand. The more transparency competition between service providers or entrepreneurs is the one essential key factor to promote the industry expansion and benefits to consumers. Currently, there are only two entrepreneurs in the passenger transportation market between Thailand and Laos PDR. The studies in this research area mostly focus on market between other countries. The number of passengers travel between Thailand and Laos PDR has increased because of the transportation convenient by crossing the Thai-Loas Friendship Bridge. The scope of this study concentrates on the market structure and competition perspectives. There are only 2 firms in the market. Consequently, it can be affirmed that the market is clearly concentrated. It is useful to calculate the indices. A concentrated market increases the potential for oligopolistic behavior by the two firms via how the market works in practice e.g. price setting behavior and service scheduling. Therefore, it is very useful to study the market structure and performance in order to implement effectiveness enhancing strategies for entrepreneurs to be mutual benefits as well as to consumers. Moreover, the results of this study can be used as guidelines for both entrepreneurs and related government organizations. The structure of article consist of objectives and scope of the study, conceptual framework, research methodology, results of the study, discussion, Thanet, Int J Econ and Manage 2014, 3:1 DOI: 10.4172/2162-6359.3.1000164 Research Article Open Access Int J Econ and Manage ISSN:2162-6359 IJEMS, an open access journal Volume 3 • Issue 1 • 164 International Journal of Economics & Management Sciences I n t e r n a t i o n a l J o u r n a l o f E c o n o m i c s & M a n a g e m e n t S c i e n c e s ISSN: 2162-6359