TITLE:
Shipping Firms’ Efficiency Evaluation through Stochastic Frontier Analysis
AUTHORS:
Dimitris Gavalas
KEYWORDS:
Financial Risk, Assessment Tools, Stochastic Frontier Analysis, Shipping Industry
JOURNAL NAME:
Modern Economy,
Vol.7 No.8,
July
28,
2016
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.