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Abstract: This study analyses the effect of cargo specialisation on Spanish Port Authorities? technical efficiency. To the best of our knowledge, this is the first study to contend that the effect of cargo specialisation on port efficiency may vary at different levels of specialisation. Specialisation/diversification strategies are examined under different scenarios. A stochastic input-oriented distance function model that accounts for Port Authorities? heterogeneity is constructed. The results show that increasing specialisation in general cargo improves technical efficiency; however, specialisation in liquid or solid bulk cargo is not recommended?such cargo should ideally be handled jointly with other types of cargo. Finally, full specialisation is also not recommended in terms of technical efficiency gains.

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