THE RESPONSE OF SHIPBUILDING ACTIVITIES TO FREIGHT RATES

Year 2018, Volume: 4 Issue: 1, 120 - 136, 13.06.2018

Sadık Özlen Başer , Abdullah Açık

https://doi.org/10.29131/uiibd.415303

Cited By: 5

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.

Keywords

Freight rates, shipbuilding, time-lagged response

THE RESPONSE OF SHIPBUILDING ACTIVITIES TO FREIGHT MARKET

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.

Keywords

Navlun oranları, gemi inşa, zaman-gecikmeli tepki

References

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