A directional relationship between freight and newbuilding markets: A panel analysis

Jane Jing Xu, Tsz Leung Yip and Liming Liu
Additional contact information
Jane Jing Xu: Cardiff Business School, Cardiff University, Cardiff, United Kingdom
Tsz Leung Yip: Faculty of Business, Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hung Hom, Hong Kong
Liming Liu: Faculty of Business, Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hung Hom, Hong Kong

Maritime Economics & Logistics, 2011, vol. 13, issue 1, 44-60

Abstract: This article examines the dynamic relationship between international sea freight rate and newbuilding price by employing panel cointegration testing and estimating techniques. The primary question this article addresses is whether the goods (new ships) price and service (sea freight) rate lead or lag one another in a Granger-cause sense, or simultaneously move together. Monthly panel data on three different bulk shipping market segments over the period 1998–2009 are exploited in empirical analysis. Various panel unit root tests demonstrate that the data variables are integrated with unit roots, whereas panel cointegration techniques are used to estimate the dynamic relationship. A positive directional relationship from freight rate to newbuilding price is found, and freight rate is more sensitive to market changes than newbuilding price. These results indicate that investment in new ships is encouraged by a strong freight market.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.palgrave-journals.com/mel/journal/v13/n1/pdf/mel201020a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/mel/journal/v13/n1/full/mel201020a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:marecl:v:13:y:2011:i:1:p:44-60

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41278/PS2

Access Statistics for this article

Maritime Economics & Logistics is currently edited by Hercules E. Haralambides

More articles in Maritime Economics & Logistics from Palgrave Macmillan, International Association of Maritime Economists (IAME) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().