A Critical Review of the Literature on Firm-Level Theories on Ship Investment

Sinem Celik Girgin, Thanasis Karlis and Hong-Oanh Nguyen
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Sinem Celik Girgin: Department of Maritime and Logistics Management, Australian Maritime College, University of Tasmania, Newnham 7248, Australia
Thanasis Karlis: Department of Maritime and Logistics Management, Australian Maritime College, University of Tasmania, Newnham 7248, Australia
Hong-Oanh Nguyen: Department of Maritime and Logistics Management, Australian Maritime College, University of Tasmania, Newnham 7248, Australia

IJFS, 2018, vol. 6, issue 1, 1-19

Abstract: The maritime industry is one of those rare industries that are both highly international integrated to international trade and also highly capital intensive dependent on substantial investment amount. In the literature, ship investments have not been widely examined through the firm-level investment theories to explore the link between investment level and asset price valuation. The general trend in the literature of ship investments is to analyse the relationship among the shipping markets (newbuilding, second-hand, freight rate and scrap) and their impact on asset price valuation, the timing of investments and market entry and exit conditions. In this paper, we extensively reviewed the literature of firm-level investment theories and ship investments. We showed that the application of firm-level investment theories to the ship investments is confined to the basic investment valuation models, such as Net Present Value and Real Option Analysis. Ship investments need to be examined by firm-level investment theories to define firm/industry value maximization level within the approach of the solid investment theories.

Keywords: investment theories; microeconomics; ship investments; maritime industry (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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