Price Formation of Dry Bulk Carriers in the Chinese Shipbuilding Industry

Liping Jiang ()
Additional contact information
Liping Jiang: Department of Environmental and Business Economics, University of Southern Denmark

No 104/10, Working Papers from University of Southern Denmark, Department of Sociology, Environmental and Business Economics

Abstract: In this paper we present, for the first time, the price formation of China’s dry bulk carrier using vessel prices quoted by major Chinese shipyards in actual shipbuilding orders. This allows us to investigate the relationship of price and determinants in the Chinese shipbuilding industry by including generic market factors as well as Chinese elements. The analysis, employing Principal Component Regression (PCR) approach, indicates that the time charter rate has the most significantly positive impact. While increases in other four factors, namely shipbuilding cost, price cost margin, shipbuilding capacity utilization and credit rate, have descending order of positive influences. Different from traditional perception, we assert that the most important role of time charter rate plays mainly attributes to the ‘China Factor’ in bulk carrier sector. In addition, simulations are performed to investigate what would happen to the Chinese dry bulk carrier prices under changes of time charter rate and shipbuilding cost. This paper has implications for the Chinese shipyards, shipbuilding industry customers and industry policy makers. Acknowledgment - This research is partly funded by the Chinese Scholarship Council and TORM Foundation.

Keywords: Price Formation; Dry Bulk Carrier; Chinese Shipbuilding Industry (search for similar items in EconPapers)
Pages: 36 pages
Date: 2010-12
New Economics Papers: this item is included in nep-tra
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sdu.dk/~/media/Files/Om_SDU/Institutter/Miljo/ime/wp/jiang104.ashx First version, 2010-12 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.sdu.dk:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sdk:wpaper:104

Access Statistics for this paper

More papers in Working Papers from University of Southern Denmark, Department of Sociology, Environmental and Business Economics Contact information at EDIRC.
Bibliographic data for series maintained by Ulla H. Oehlenschläger ( this e-mail address is bad, please contact ).