Price formation of dry bulk carriers in the Chinese shipbuilding industry

Liping Jiang and Jørgen Lauridsen

Maritime Policy & Management, 2012, vol. 39, issue 3, 339-351

Abstract: In this paper, we present, for the first time, the price formation of Chinese dry bulk carriers based on the historical shipbuilding contract prices. Price determinants include generic market factors as well as Chinese elements. Principal component regression analysis is employed as the solution for the multicollinearity problem among explanatory variables. The result indicates that the time charter rate has the most significant positive impact on shipbuilding price; increases in three other factors, namely the cost of shipbuilding, the price-cost margin and the shipbuilding capacity utilisation, have positive influences in the descending order. Unlike the traditional perception of newbuilding price that shipbuilding cost has the most significant effect, we assert that the most important role the time charter rate plays is attributed mainly to the ‘China Factor’ in the bulk carrier sector. In addition, simulations are performed to investigate what would happen to the Chinese dry bulk carrier prices under changes in the time charter rate and shipbuilding cost. The findings are useful for Chinese shipyards, shipowners and emerging shipbuilders.

Date: 2012
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/03088839.2012.671544 (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:taf:marpmg:v:39:y:2012:i:3:p:339-351

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TMPM20

DOI: 10.1080/03088839.2012.671544

Access Statistics for this article

Maritime Policy & Management is currently edited by Dr Kevin Li and Heather Leggate McLaughlin

More articles in Maritime Policy & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().