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Price Volatility Spillover in Ship Demolition Markets

Year 2019, Volume: 6 Issue: 2, 311 - 322, 10.07.2019
https://doi.org/10.17541/optimum.531561

Abstract

World ship demolition activities are
mainly carried out in Bangladesh, China, India, Turkey and Pakistan. Conducting
in so few countries leads to a high level of competition among countries, as
well as being influenced by each other's prices. So, there is no natural
situation for each other to follow their prices, and this can be reflected as a
flow of information to the variances of the prices. When this information flow
exists, volatility spreads can be observed between the prices. In this context,
this study aims to determine the flow of information between the major
countries operating in the demolition sector in the world by using the
causality in variance method. The dataset covers the dates between 8th January
2013 and 24th December 2018 and consist of 309 observations on a weekly basis.
According to the results, there are volatility spillovers from Turkish
demolition prices to all other country prices except China in terms of both
general cargo and tanker ships. In addition, there are volatility spillovers
from Pakistani tanker demolition prices to Bangladeshi and Indian prices. These
results reveal that the demolition business entities of other countries follow
the Turkish prices in determining general and tanker demolition prices, and
Pakistani prices only in determining tanker demolition prices. Thus, the
volatilities in Turkish and Pakistani prices are reflected in the prices of the
other demolition countries. On the other hand, Chinese has a special position
since its prices are not affected by the other prices and do not affect the
other prices.

References

  • Açık, A. and Başer, S. Ö. (2017). The relationship between freight revenues and vessel disposal decisions. Ekonomi, Politika & Finans Araştırmaları Dergisi, 2(2), 96-112.
  • Açık, A , Başer, S . (2018a). The relationship between freight rates and demolition prices. Uluslararası Ticaret ve Ekonomi Araştırmaları Dergisi, 2(1), 16-32.
  • Açık, A. and Başer, S. Ö. (2018b). Market efficiency in ship demolition Prices, In: Paper Presented at the International Conference on Empirical Economics and Social Sciences, 780-792, Bandirma, Turkey
  • Athenian Shipbrokers SA (2018). Weekly Demolition Reports. [Online: https://www.hellenicshippingnews.com], Access Date: 22.01.2019.
  • Bildirici, M. E. and Turkmen, C. (2015). Nonlinear causality between oil and precious metals. Resources Policy, 46, 202-211.
  • Buxton, I. L. (1991). The market for ship demolition. Maritime Policy & Management, 18(2): 105–112.
  • Cheung, Y. W. and Ng, L. K. (1996). A causality-in-variance test and its application to financial market prices. Journal of Econometrics, 72(1-2), 33-48.
  • Evans, J. (1989). Replacement, obsolescence and modifications of ships. Maritime Policy and Management, 16(3), 223-231.
  • Hafner, C. M. and Herwartz, H. (2006). A lagrange multiplier test for causality in variance. Economics Letters, 93(1), 137-141.
  • Jugović, A., Komadina, N. and Hadžić, A. (2015). Factors influencing the formation of freight rates on maritime shipping markets. Scientific Journal of Maritime Research, 29, 23–29.
  • Kagkarakis, N.D., Merikas, A.G., Merika, A. (2016). Modelling and forecasting the demolition market in shipping. Marititime Policy & Management. 43(8), 1021-1035.
  • Karlis, T. and Polemis, D. (2016). Ship demolition activity: A monetary flow process approach. Scientific Journal of Maritime Research, 30, 128-132.
  • Knapp, S., Kumar, S.N., Remijn, A.B. (2008). Econometric analysis of the ship demolition market. Maritime Policy & Management. 32 (6), 1023–1036.
  • Koseoglu, S. D. and Cevik, E. I. (2013). Testing for causality in mean and variance between the stock market and the foreign exchange market: An application to the major Central and Eastern European countries. Finance a Uver, 63(1), 65.
  • Månsson, K. and Shukur, G. (2009). Granger causality test in the presence of spillover effects. Communications in Statistics-Simulation and Computation, 38(10), 2039-2059.
  • Mikelis, N.E., 2013. Ship recycling markets and the impact of the Hong Kong convention. In: Paper Presented at the International Conference on Ship Recycling, Malmo, Sweden.
  • Nazlioglu, S., Erdem, C. and Soytas, U. (2013). Volatility spillover between oil and agricultural commodity markets. Energy Economics, 36, 658-665.
  • Nouira R, Amor TH, Rault C, (2018). Oil price fluctuations and exchange rate dynamics in the MENA region: Evidence from non-causality-in-variance and asymmetric non-causality tests. Quarterly Review of Economics and Finance, In Press.
  • Saraf, M., Stuer-Lauridsen, F., Dyoulgerov, M., Bloch, R., Wingfield, S., & Watkinson, R. (2010). Ship breaking and recycling industry in Bangladesh and Pakistan. The World Bank Washington.
  • Shahbaz, M., Van Hoang, T. H., Mahalik, M. K. and Roubaud, D. (2017). Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis. Energy Economics, 63, 199-212.
  • Stopford, M. (2009). Maritime economics (3rd ed). London: Routledge.
  • Strandenes, S. P. (2010). Economics of the markets for ships. In Grammenos, C (ed). The handbook of maritime economics and business (2nd ed) (pp. 217-234).
  • UNCTAD (2018). Demolition statistics, [Online: https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=89492], Access Date: 21.01.2019.
  • Yin, J. and Fan, L. (2018). Survival analysis of the world ship demolition market. Transport Policy, 63, 141-156.

Gemi Hurdası Piyasalarında Fiyat Oynaklık Yayılımı

Year 2019, Volume: 6 Issue: 2, 311 - 322, 10.07.2019
https://doi.org/10.17541/optimum.531561

Abstract

Dünya gemi söküm işlemleri çoğunlukla Bangladeş, Çin,
Hindistan, Pakistan ve Türkiye’de yapılmaktadır. Az sayıda ülkede yapılması,
fiyatlarının birbirlerinden etkilenmelerinin yanı sıra ülkeler arasında yüksek
derecede rekabet ortamının olmasına neden olmaktadır. Bu yüzden birbirlerinin
fiyatlarını takip etmelerinden daha doğal bir durum yoktur ve bu durum
fiyatların varyanslarına bilgi akışı şeklinde yansımaktadır. Bu bilgi akışı
mevcut olduğunda, fiyatlar arasında oynaklık yayılımları gözlemlenmektedir. Bu
çerçevede bu çalışma, dünyada hurda piyasasında aktif olan ana ülkelerin
fiyatları arasındaki bilgi akışını varyansta nedensellik yöntemiyle tespit
etmeyi amaçlamaktadır. Veri seti 8 Ocak 2013 ve 24 Aralık 2018 tarihleri
arasını kapsamaktadır ve haftalık bazda 309 gözlemden oluşmaktadır. Sonuçlara
göre, Türk hurda fiyatlarından hem genel yük hem de tanker gemi tipinden de
olmak üzere Çin dışındaki tüm ülkelerin hurda fiyatlarına oynaklık yayılımları
tespit edilmiştir. Ayrıca, Pakistan tanker hurda fiyatlarından Bangladeş ve
Hindistan fiyatlarına da oynaklık yayılımları mevcuttur. Bu sonuçlar diğer
ülkelerdeki hurda işletmelerinin genel yük ve tanker hurda fiyatlarını
belirlerken Türk fiyatlarını izlediklerini, ve tanker hurda fiyatlarını
belirlerken de Pakistan fiyatlarını izlediklerini ortaya koymaktadır. Böylece,
Türk ve Pakistan fiyatlarındaki oynaklıklar diğer hurda ülkelerinin fiyatlarına
yansımaktadır. Diğer taraftan Çin ise, fiyatı ne diğer fiyatları etkileyen ne
de diğer fiyatlardan etkilenen bir yapıda olduğu için özel bir konumdadır.

References

  • Açık, A. and Başer, S. Ö. (2017). The relationship between freight revenues and vessel disposal decisions. Ekonomi, Politika & Finans Araştırmaları Dergisi, 2(2), 96-112.
  • Açık, A , Başer, S . (2018a). The relationship between freight rates and demolition prices. Uluslararası Ticaret ve Ekonomi Araştırmaları Dergisi, 2(1), 16-32.
  • Açık, A. and Başer, S. Ö. (2018b). Market efficiency in ship demolition Prices, In: Paper Presented at the International Conference on Empirical Economics and Social Sciences, 780-792, Bandirma, Turkey
  • Athenian Shipbrokers SA (2018). Weekly Demolition Reports. [Online: https://www.hellenicshippingnews.com], Access Date: 22.01.2019.
  • Bildirici, M. E. and Turkmen, C. (2015). Nonlinear causality between oil and precious metals. Resources Policy, 46, 202-211.
  • Buxton, I. L. (1991). The market for ship demolition. Maritime Policy & Management, 18(2): 105–112.
  • Cheung, Y. W. and Ng, L. K. (1996). A causality-in-variance test and its application to financial market prices. Journal of Econometrics, 72(1-2), 33-48.
  • Evans, J. (1989). Replacement, obsolescence and modifications of ships. Maritime Policy and Management, 16(3), 223-231.
  • Hafner, C. M. and Herwartz, H. (2006). A lagrange multiplier test for causality in variance. Economics Letters, 93(1), 137-141.
  • Jugović, A., Komadina, N. and Hadžić, A. (2015). Factors influencing the formation of freight rates on maritime shipping markets. Scientific Journal of Maritime Research, 29, 23–29.
  • Kagkarakis, N.D., Merikas, A.G., Merika, A. (2016). Modelling and forecasting the demolition market in shipping. Marititime Policy & Management. 43(8), 1021-1035.
  • Karlis, T. and Polemis, D. (2016). Ship demolition activity: A monetary flow process approach. Scientific Journal of Maritime Research, 30, 128-132.
  • Knapp, S., Kumar, S.N., Remijn, A.B. (2008). Econometric analysis of the ship demolition market. Maritime Policy & Management. 32 (6), 1023–1036.
  • Koseoglu, S. D. and Cevik, E. I. (2013). Testing for causality in mean and variance between the stock market and the foreign exchange market: An application to the major Central and Eastern European countries. Finance a Uver, 63(1), 65.
  • Månsson, K. and Shukur, G. (2009). Granger causality test in the presence of spillover effects. Communications in Statistics-Simulation and Computation, 38(10), 2039-2059.
  • Mikelis, N.E., 2013. Ship recycling markets and the impact of the Hong Kong convention. In: Paper Presented at the International Conference on Ship Recycling, Malmo, Sweden.
  • Nazlioglu, S., Erdem, C. and Soytas, U. (2013). Volatility spillover between oil and agricultural commodity markets. Energy Economics, 36, 658-665.
  • Nouira R, Amor TH, Rault C, (2018). Oil price fluctuations and exchange rate dynamics in the MENA region: Evidence from non-causality-in-variance and asymmetric non-causality tests. Quarterly Review of Economics and Finance, In Press.
  • Saraf, M., Stuer-Lauridsen, F., Dyoulgerov, M., Bloch, R., Wingfield, S., & Watkinson, R. (2010). Ship breaking and recycling industry in Bangladesh and Pakistan. The World Bank Washington.
  • Shahbaz, M., Van Hoang, T. H., Mahalik, M. K. and Roubaud, D. (2017). Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis. Energy Economics, 63, 199-212.
  • Stopford, M. (2009). Maritime economics (3rd ed). London: Routledge.
  • Strandenes, S. P. (2010). Economics of the markets for ships. In Grammenos, C (ed). The handbook of maritime economics and business (2nd ed) (pp. 217-234).
  • UNCTAD (2018). Demolition statistics, [Online: https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=89492], Access Date: 21.01.2019.
  • Yin, J. and Fan, L. (2018). Survival analysis of the world ship demolition market. Transport Policy, 63, 141-156.
There are 24 citations in total.

Details

Primary Language English
Subjects Finance
Journal Section Articles
Authors

Abdullah Açık 0000-0003-4542-9831

Sadık Özlen Başer 0000-0001-6632-2617

Publication Date July 10, 2019
Submission Date February 23, 2019
Published in Issue Year 2019 Volume: 6 Issue: 2

Cite

APA Açık, A., & Başer, S. Ö. (2019). Price Volatility Spillover in Ship Demolition Markets. Optimum Ekonomi Ve Yönetim Bilimleri Dergisi, 6(2), 311-322. https://doi.org/10.17541/optimum.531561
AMA Açık A, Başer SÖ. Price Volatility Spillover in Ship Demolition Markets. OJEMS. July 2019;6(2):311-322. doi:10.17541/optimum.531561
Chicago Açık, Abdullah, and Sadık Özlen Başer. “Price Volatility Spillover in Ship Demolition Markets”. Optimum Ekonomi Ve Yönetim Bilimleri Dergisi 6, no. 2 (July 2019): 311-22. https://doi.org/10.17541/optimum.531561.
EndNote Açık A, Başer SÖ (July 1, 2019) Price Volatility Spillover in Ship Demolition Markets. Optimum Ekonomi ve Yönetim Bilimleri Dergisi 6 2 311–322.
IEEE A. Açık and S. Ö. Başer, “Price Volatility Spillover in Ship Demolition Markets”, OJEMS, vol. 6, no. 2, pp. 311–322, 2019, doi: 10.17541/optimum.531561.
ISNAD Açık, Abdullah - Başer, Sadık Özlen. “Price Volatility Spillover in Ship Demolition Markets”. Optimum Ekonomi ve Yönetim Bilimleri Dergisi 6/2 (July 2019), 311-322. https://doi.org/10.17541/optimum.531561.
JAMA Açık A, Başer SÖ. Price Volatility Spillover in Ship Demolition Markets. OJEMS. 2019;6:311–322.
MLA Açık, Abdullah and Sadık Özlen Başer. “Price Volatility Spillover in Ship Demolition Markets”. Optimum Ekonomi Ve Yönetim Bilimleri Dergisi, vol. 6, no. 2, 2019, pp. 311-22, doi:10.17541/optimum.531561.
Vancouver Açık A, Başer SÖ. Price Volatility Spillover in Ship Demolition Markets. OJEMS. 2019;6(2):311-22.

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