Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners
The aim of this study is to empirically examine the impact of real interest rate on global fleet adjustment processes by modelling new orders and demolitions. The data set used consists of 34 annual observations and covers the years between 1985 and 2018. According to the results, the freight rate h...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Ekonomi ve Finansal Araştırmalar Derneği
2020-04-01
|
| Series: | Ekonomi, Politika & Finans Araştırmaları Dergisi |
| Subjects: | |
| Online Access: | https://dergipark.org.tr/tr/download/article-file/1080908 |
| _version_ | 1827572640544456704 |
|---|---|
| author | Abdullah Açık Halil Hüseyin İshak Kesiktaş Sadık Özlen Başer |
| author_facet | Abdullah Açık Halil Hüseyin İshak Kesiktaş Sadık Özlen Başer |
| author_sort | Abdullah Açık |
| collection | DOAJ |
| description | The aim of this study is to empirically examine the impact of real interest rate on global fleet adjustment processes by modelling new orders and demolitions. The data set used consists of 34 annual observations and covers the years between 1985 and 2018. According to the results, the freight rate has a positive impact on amount of new ship orders and a negative impact on amount of ships scrapped, while the real interest rate has a negative impact on both amount of new ship orders and ships scrapped. The impact of freight rate on new ship orders and demolitions is clear whereas the impact of the real interest rate may be explained by two reasons. Increasing capital costs due to increasing interest rates may cause decrease in both new orders and demolitions as ordering new ships becomes more expensive. The second one may be related to expectations of ship investors to gain more revenue by evaluating their capitals on higher interest rates instead of ordering new ships. Therefore, it is important to limit negative impact of high interest rates by various policies so that maritime transport sector can contribute to economic growth by facilitating trade with sustainable costs. |
| first_indexed | 2024-03-07T19:06:46Z |
| format | Article |
| id | doaj.art-defc5e858ffc45ad92e7a9304e8533b6 |
| institution | Directory Open Access Journal |
| issn | 2587-151X |
| language | English |
| last_indexed | 2024-03-07T19:06:46Z |
| publishDate | 2020-04-01 |
| publisher | Ekonomi ve Finansal Araştırmalar Derneği |
| record_format | Article |
| series | Ekonomi, Politika & Finans Araştırmaları Dergisi |
| spelling | doaj.art-defc5e858ffc45ad92e7a9304e8533b62024-03-01T08:31:42ZengEkonomi ve Finansal Araştırmalar DerneğiEkonomi, Politika & Finans Araştırmaları Dergisi2587-151X2020-04-0151668010.30784/epfad.642061957Role of Interest Rates on Fleet Capacity Adjustment Decisions of ShipownersAbdullah Açık0Halil Hüseyin İshak Kesiktaş1Sadık Özlen Başer2DOKUZ EYLÜL ÜNİVERSİTESİ, DENİZCİLİK FAKÜLTESİ, DENİZCİLİK İŞLETMELERİ YÖNETİMİ BÖLÜMÜDOKUZ EYLÜL ÜNİVERSİTESİ, DENİZCİLİK FAKÜLTESİ, DENİZCİLİK İŞLETMELERİ YÖNETİMİ BÖLÜMÜDOKUZ EYLÜL ÜNİVERSİTESİ, DENİZCİLİK FAKÜLTESİ, DENİZCİLİK İŞLETMELERİ YÖNETİMİ BÖLÜMÜThe aim of this study is to empirically examine the impact of real interest rate on global fleet adjustment processes by modelling new orders and demolitions. The data set used consists of 34 annual observations and covers the years between 1985 and 2018. According to the results, the freight rate has a positive impact on amount of new ship orders and a negative impact on amount of ships scrapped, while the real interest rate has a negative impact on both amount of new ship orders and ships scrapped. The impact of freight rate on new ship orders and demolitions is clear whereas the impact of the real interest rate may be explained by two reasons. Increasing capital costs due to increasing interest rates may cause decrease in both new orders and demolitions as ordering new ships becomes more expensive. The second one may be related to expectations of ship investors to gain more revenue by evaluating their capitals on higher interest rates instead of ordering new ships. Therefore, it is important to limit negative impact of high interest rates by various policies so that maritime transport sector can contribute to economic growth by facilitating trade with sustainable costs.https://dergipark.org.tr/tr/download/article-file/1080908interest rateship investmentdemolitionfaiz oranıgemi yatırımıgemi hurdası |
| spellingShingle | Abdullah Açık Halil Hüseyin İshak Kesiktaş Sadık Özlen Başer Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners Ekonomi, Politika & Finans Araştırmaları Dergisi interest rate ship investment demolition faiz oranı gemi yatırımı gemi hurdası |
| title | Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners |
| title_full | Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners |
| title_fullStr | Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners |
| title_full_unstemmed | Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners |
| title_short | Role of Interest Rates on Fleet Capacity Adjustment Decisions of Shipowners |
| title_sort | role of interest rates on fleet capacity adjustment decisions of shipowners |
| topic | interest rate ship investment demolition faiz oranı gemi yatırımı gemi hurdası |
| url | https://dergipark.org.tr/tr/download/article-file/1080908 |
| work_keys_str_mv | AT abdullahacık roleofinterestratesonfleetcapacityadjustmentdecisionsofshipowners AT halilhuseyinishakkesiktas roleofinterestratesonfleetcapacityadjustmentdecisionsofshipowners AT sadıkozlenbaser roleofinterestratesonfleetcapacityadjustmentdecisionsofshipowners |