Shipping Firms’ Efficiency Evaluation through Stochastic Frontier Analysis - Modern Economy

ME > Vol.7 No.8, July 2016

Modern Economy

Volume 7, Issue 8 (July 2016)

ISSN Print: 2152-7245 ISSN Online: 2152-7261

Google-based Impact Factor: 0.74 Citations h5-index & Ranking

Shipping Firms’ Efficiency Evaluation through Stochastic Frontier Analysis ()

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DOI: 10.4236/me.2016.78090 1,519 Downloads 2,557 Views Citations

Author(s)

Dimitris Gavalas

Affiliation(s)

Shipping, Trade & Transport Department, Business School, University of Aegean, Chios, Greece.

ABSTRACT

The concept of this study is to note whether financial risk assessment tools impact a shipping firm’s performance, competitiveness and efficiency. Stochastic Frontier Analysis (SFA) is used in the evaluation of such issues. The shipping industry has been classified in three segments, namely dry bulk, tankers (including LPG and LNG) and containers. The influence of the risk assessment indicators on market and operational efficiency is subsequently determined by using a panel regression. This assists to determine whether different asset allocation and risk management techniques improve the performance of shipping firms. Our sample consists of 82 international ship-owning firms drawn from Bloomberg database for the period of 2001-2014. Through estimating efficiency, our model shows that containerized cargo firms have better performance in market and operating efficiency as well.

KEYWORDS

Financial Risk, Assessment Tools, Stochastic Frontier Analysis, Shipping Industry

Share and Cite:

Gavalas, D. (2016) Shipping Firms’ Efficiency Evaluation through Stochastic Frontier Analysis. Modern Economy, 7, 867-874. doi: 10.4236/me.2016.78090.

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