The Deregulation of the Swedish Railway - On Track or Derailed?

Abstract: Since 2010, the Swedish railway has been open to competition for passenger train traffic. Despite extensive deregulations, the state-owned enterprise and previous monopoly Statens Järnvägar has managed to retain its previous position as the reigning actor of the Swedish railway. This thesis aims to analyse an incumbent firm's effect on an industry, targeted with regulatory interventions. It will be done by examining the current competition on Sweden's two most heavily burdened routes. The Structure-Conduct-Performance approach of the studies in industrial organisations is used to determine the effectiveness of the competitive industry. The core of the research is based on data regarding different departures on the routes examined in tables, charts and with regression following the Ordinary Least Squares method. These are further analysed with the theoretical approach to demonstrate how factors such as price and quantity are linked to the strategic behaviour of firms. According to the results, SJ has successfully preserved its previous monopoly market power despite deregulation and increased competition. This may result from incorrectly implemented regulatory reforms or SJ strategically preventing rival firms from properly establishing themselves.