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Determinants of Ship-Management Revenues: The Case of Cyprus
Version 1
: Received: 14 April 2023 / Approved: 20 April 2023 / Online: 20 April 2023 (03:54:34 CEST)
A peer-reviewed article of this Preprint also exists.
Michail, N.A.; Melas, K.D.; Louca, K.G. Determinants of Ship Management Revenues: The Case of Cyprus. Economies 2023, 11, 184. Michail, N.A.; Melas, K.D.; Louca, K.G. Determinants of Ship Management Revenues: The Case of Cyprus. Economies 2023, 11, 184.
Abstract
We explore, for the first time in the literature, how the revenues of the ship-management companies respond to macroeconomic exogenous shocks. Using data for ship-management companies in Cyprus, we find evidence that a demand shock has the largest impact on revenues, exhibiting an almost one-for-one relationship. If the demand shock is permanent, we observe a ceteris paribus permanent effect on revenues. Similarly, this occurs irrespective of the final effect that demand has on the relevant freight rate, proxied via the Baltic dry and tanker (dirty and clean) indices. The BDI and the BDTI indices have smaller effect on revenues, standing at approximately 0.05% for every 1% shock, while the clean tanker index does not have an effect, most likely due to their fleet composition. In accordance with the literature, we find that a shock in the price of Brent oil increases revenues. Our results bear importance not only for ship-management companies per se, but also for countries that are ship-management hubs.
Keywords
shipping; ship-management; freight rates; Bayesian VAR
Subject
Business, Economics and Management, Business and Management
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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