Research Article
BibTex RIS Cite

THE RESPONSE OF SHIPBUILDING ACTIVITIES TO FREIGHT RATES

Year 2018, Volume: 4 Issue: 1, 120 - 136, 13.06.2018
https://doi.org/10.29131/uiibd.415303

Abstract

Maritime transport has different economic
characteristics than most other markets. These features cause continuous
cyclical movements on the market and cause some businesses to eradicate from
the market due to making the wrong decisions. Apart from the changes in the
demand side, the short-term inelasticity of the supply side contributes much to
these cycles.
The reason is that the shipbuilding
process lasts for 1-3 years, and the effects of the ordering decision taken
today are reflected in the market when the construction process is over.
In this respect, since the main factor influencing the
investment decision is income, it is certain that there is a delayed
relationship between the freight rates and the completed ship tonnage. The
purpose of this study is to contribute to the current literature by empirically
testing this delayed relationship, which is already established in theory.
The Baltic Dry Index (BDI), which is based on freight
rates, is used as a representative of freight revenue. Data used in the study
are annual observations covering the years 1985 and 2017.
Correlation, regression and cross-correlation methods
were used to determine the relationship between freight revenue and completed
tonnage.
As a result of the study, it was
found that the completed tonnage reacted change in the income after 2 years and
there was a positive relationship between the variables.

References

  • BEENSTOCK, M. and VERGOTTIS, A. (1989). “An Econometric Model of the World Market for Dry Cargo Freight and Shipping”, Applied Economics, 21(3), 339-356.
  • BLOOMBERG DATABASE, Baltic Dry Index, Retrieved 20th February 2018
  • CHANG, M. (2014). Principles of Scientific Methods. New York: CRS Press
  • GREENWOOD, R. and HANSON, S. G. (2014). “Waves in Ship Prices and Investment”, The Quarterly Journal of Economics, 130(1), 55-109.
  • GUJRATI, D.N. (2004). Basic Econometric, (4th Ed.). The McGraw-Hill Companies. NewYork.
  • KALOUPTSIDI, M. (2014). “Time to Build and Fluctuations in Bulk Shipping”, American Economic Review, 104(2), 564-608.
  • KARAKITSOS, E. and VARNAVIDES, L. (2014). Maritime Economics: A Macroeconomic Approach. Springer.
  • KIM, C. Y. and PARK, K. (2017). “An Analysis on the Causal Relationship between Freight Rate and Newbuilding Orders: Implications for Korean Trade and Shipbuilding Companies”, Journal of Korea Trade, 21(1), 22-37.
  • MERIKAS, A. G., MERIKA, A. A., and KOUTROUBOUSIS, G. (2008). “Modelling the Investment Decision of The Entrepreneur in the Tanker Sector: Choosing Between A Second-Hand Vessel and A Newly Built One”, Maritime Policy & Management, 35(5), 433-447.
  • SAJ (The Shipbuilders’ Association of Japan), Completed Tonnage Statistics, Retrieved 10th March 2018
  • SCARSI, R. (2007). “The Bulk Shipping Business: Market Cycles and Shipowners’ Biases”, Maritime Policy & Management, 34(6), 577-590.
  • STOPFORD, M. (2009). Maritime economics. Routledge. London and New York
  • TSOLAKIS, S., (2005). Econometric Analysis of Bulk Shipping Markets: Implications for Investment Strategies and Financial Decision-Making, Doctoral Thesis, Erasmus University Rotterdam.

THE RESPONSE OF SHIPBUILDING ACTIVITIES TO FREIGHT MARKET

Year 2018, Volume: 4 Issue: 1, 120 - 136, 13.06.2018
https://doi.org/10.29131/uiibd.415303

Abstract

Maritime transport has different economic
characteristics than most other markets. These features cause continuous
cyclical movements on the market and cause some businesses to eradicate from
the market due to making the wrong decisions. Apart from the changes in the
demand side, the short-term inelasticity of the supply side contributes much to
these cycles. The reason is that the shipbuilding process lasts for 1-3 years,
and the effects of the ordering decision taken today are reflected in the
market when the construction process is over. In this respect, since the main
factor influencing the investment decision is income, it is certain that there
is a delayed relationship between the freight rates and the completed ship
tonnage. The purpose of this study is to contribute to the current literature
by empirically testing this delayed relationship, which is already established
in theory. The Baltic Dry Index (BDI), which is based on freight rates, is used
as a representative of freight revenue. Data used in the study are annual
observations covering the years 1985 and 2017. Correlation, regression and
cross-correlation methods were used to determine the relationship between
freight revenue and completed tonnage. As a result of the study, it was found
that the completed tonnage reacted change in the income after 2 years and there
was a positive relationship between the variables.

References

  • BEENSTOCK, M. and VERGOTTIS, A. (1989). “An Econometric Model of the World Market for Dry Cargo Freight and Shipping”, Applied Economics, 21(3), 339-356.
  • BLOOMBERG DATABASE, Baltic Dry Index, Retrieved 20th February 2018
  • CHANG, M. (2014). Principles of Scientific Methods. New York: CRS Press
  • GREENWOOD, R. and HANSON, S. G. (2014). “Waves in Ship Prices and Investment”, The Quarterly Journal of Economics, 130(1), 55-109.
  • GUJRATI, D.N. (2004). Basic Econometric, (4th Ed.). The McGraw-Hill Companies. NewYork.
  • KALOUPTSIDI, M. (2014). “Time to Build and Fluctuations in Bulk Shipping”, American Economic Review, 104(2), 564-608.
  • KARAKITSOS, E. and VARNAVIDES, L. (2014). Maritime Economics: A Macroeconomic Approach. Springer.
  • KIM, C. Y. and PARK, K. (2017). “An Analysis on the Causal Relationship between Freight Rate and Newbuilding Orders: Implications for Korean Trade and Shipbuilding Companies”, Journal of Korea Trade, 21(1), 22-37.
  • MERIKAS, A. G., MERIKA, A. A., and KOUTROUBOUSIS, G. (2008). “Modelling the Investment Decision of The Entrepreneur in the Tanker Sector: Choosing Between A Second-Hand Vessel and A Newly Built One”, Maritime Policy & Management, 35(5), 433-447.
  • SAJ (The Shipbuilders’ Association of Japan), Completed Tonnage Statistics, Retrieved 10th March 2018
  • SCARSI, R. (2007). “The Bulk Shipping Business: Market Cycles and Shipowners’ Biases”, Maritime Policy & Management, 34(6), 577-590.
  • STOPFORD, M. (2009). Maritime economics. Routledge. London and New York
  • TSOLAKIS, S., (2005). Econometric Analysis of Bulk Shipping Markets: Implications for Investment Strategies and Financial Decision-Making, Doctoral Thesis, Erasmus University Rotterdam.
There are 13 citations in total.

Details

Primary Language English
Journal Section Makaleler
Authors

Sadık Özlen Başer 0000-0001-6632-2617

Abdullah Açık 0000-0003-4542-9831

Publication Date June 13, 2018
Submission Date April 14, 2018
Acceptance Date May 31, 2018
Published in Issue Year 2018 Volume: 4 Issue: 1

Cite

APA Başer, S. Ö., & Açık, A. (2018). THE RESPONSE OF SHIPBUILDING ACTIVITIES TO FREIGHT RATES. Uluslararası İktisadi Ve İdari Bilimler Dergisi, 4(1), 120-136. https://doi.org/10.29131/uiibd.415303

ARAŞTIRMA VE YAYIN ETİĞİNE İLİŞKİN DERGİ POLİTİKAMIZ

Etik Kurul izni gerektiren çalışmalar (anket ya da ölçek uygulamayı gerektiren, görüşme ve gözlem içeren; doküman, resim, anket vb. diğerleri tarafından geliştirilen ve kullanım izni gerektiren çalışmalar) için etik kurullardan ya da komisyonlardan gerekli izinlerin araştırma yapılmadan önce alınmış olması, bunların makale içeriğinde belirtilmesi ya da ek olarak sunulması gerekmektedir. Bu izinlerin olmaması durumunda yayın ön inceleme safhasında yazara iade edilir.  

Diğer yandan, Araştırma Makalelerinde verisi 2020 yılından önce toplanmış makaleler için ETİK KURUL İZNİ istenmemektedir. Ancak yine bu makalelerde de yöntem kısmında verilerin toplanma tarihlerine ilişkin bilgilere yer verilmesi gerekmektedir.

Hakem değerlendirmelerinde olan araştırmalara ilişkin ham verilerin hakemler tarafından talep edildiğinde sunulması şarttır. Verilerin makalenin yayımı sonrasında da gerektiğinde sağlanması zorunludur. 

MAKALE BENZERLİK RAPORU VE BENZERLİK ORANI HAKKINDA DERGİ POLİTİKAMIZ


Aday makaleler akademik intihal engelleme programından (Örneğin: Turnitin, Ithenticate, intihal.net vb.) alınmış orijinallik raporu ile birlikte gönderilmelidir. Bu oran %20'ye kadar kabul edilmektedir. %20'nin üzerinde benzerlik oranı olan çalışmalar ön kontrol aşamasında iade edilecektir.

ISSN: 2149 - 5823