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The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries

Year 2019, Volume: 27 Issue: 42, 227 - 240, 31.10.2019
https://doi.org/10.17233/sosyoekonomi.2019.04.12

Abstract

In this study, the causal relationship between global steel prices and demolition prices in five developing countries (Bangladesh, China, India, Pakistan, and Turkey) that host five main ship scrap centers in the world are examined. The bootstrap panel Granger causality analysis is employed to take heterogeneity and cross-sectional dependence into account. The data set used in this study consists of 289 weekly observations from January 8, 2013 to July 16, 2018. As a result of the study, a collective causality relationship from steel price to demolition prices is determined and individual causality relationships for all countries except Bangladesh are identified.

References

  • Açık, A. & S. Başer (2019), “Price Volatility Spillover in Ship Demolition Markets”, Optimum Ekonomi ve Yönetim Bilimleri Dergisi, 6(2), 311-322.
  • Açık, A. & 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. Ö. (2018a), “Navlun Oranlariyla Gemi Söküm Fiyatlari Arasindaki İlişki”, Uluslararası Ticaret ve Ekonomi Araştırmaları Dergisi, 2 (1), 16-32.
  • Açık, A. & 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, <http://www.atheniansa.gr/>, 20.09.2018.
  • Bildirici, M. E., & Turkmen, C. (2015), “Nonlinear Causality Between Oil and Precious Metals”, Resources Policy, 46, 202-211.
  • Bloomberg Data Platform (2018), China Steel Prices, <https://www.bloomberg.com/professional/>, 18.07.2018.
  • Buxton, I. L. (1991), “The Market for Ship Demolition”, Maritime Policy & Management, 18 (2), 105–112.
  • Chang, T. & R. Gupta & R. Inglesi-Lotz & B. Simo-Kengne & D. Smithers & A. Trembling (2015), “Renewable energy and growth: Evidence from heterogeneous panel of G7 countries using Granger causality”, Renewable and Sustainable Energy Reviews, 52, 1405-1412.
  • Dogan, E. & A. Aslan (2017), “Exploring the relationship among CO 2 emissions, real GDP, energy consumption and tourism in the EU and candidate countries: Evidence from panel models robust to heterogeneity and cross-sectional dependence”, Renewable and Sustainable Energy Reviews, 77, 239-245.
  • Emirmahmutoglu, F. & N. Kose (2011), “Testing for Granger causality in heterogeneous mixed panels”, Economic Modelling, 28(3), 870-876.
  • Evans, J. (1989), “Replacement, Obsolescence and Modifications of Ships”, Maritime Policy and Management, 16(3), 223-231.
  • Fisher, R.A. (1932), Statistical methods for research workers, (4 th edition), Edinburgh: Oliverand Boyd.
  • Giuliodori, D. & Rodriguez, A. (2015), “Analysis of the Stainless Steel Market in the EU, China and US Using Co-Integration and VECM”, Resources Policy, 44, 12-24.
  • Hadri, K. (2000), “Testing for stationarity in heterogeneous panel data”, The Econometrics Journal, 3(2), 148-161.
  • Im, K.S. & M.H. Pesaran & Y. Shin (2003), “Testing for unit roots in heterogeneous panels”, Journal of Econometrics, 115(1), 53-74.
  • Jugović, A., Komadina, N. & 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”, Maritime Policy Management, 43(8), 1021-1035.
  • Kar, M. & S. Nazlioglu & H. Agir (2011), “Financial Development and Economic Growth Nexus in the MENA Countries: Bootstrap Panel Granger Causality Analysis”, Economic Modelling, 28(1-2), 685-693.
  • Karlis, T. & Polemis, D. (2016), “Ship Demolition Activity: A Monetary Flow Process Approach”, Scientific Journal of Maritime Research, 30, 128-132.
  • Kaya, Y. (2012), “Basel ve Hong Kong Sözleşmeleri Bağlamında Gemi Söküm Endüstrisi: Çevre, Sağlık ve Güvenlik Odaklı Bir Analiz”, “İş, Güç" Endüstri İlişkileri ve İnsan Kaynakları Dergisi, 14 (4), 71-88.
  • Knapp, S., Kumar, S.N. & Remijn, A.B., (2008), Econometric Analysis of the Ship Demolition Market, Maritime Policy&Management, 32 (6), 1023–1036.
  • Menyah, K. & S. Nazlioglu & Y. Wolde-Rufael (2014), “Financial Development, Trade Openness and Economic Growth in African Countries: New Insights from a Panel Causality Approach”, Economic Modelling, 37, 386-394.
  • Merikas, A., Merika, A. & Sharma, A. (2015), “Exploring Price Formation in the Global Ship Demolition Market”. In: 2015 Annual Meetings.
  • Mikelis, N.E. (2007), “A Statistical Overview of Ship Recycling”, In: Paper Presented at the International Symposium on Maritime Safety, Security and Environmental Protection, Athens, Greece.
  • 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.
  • Pesaran, M.H. (2004), “General diagnostic tests for cross section dependence in panels”, Cambridge: University of Cambridge, Working Papers in Economics No. 04350435.
  • Pesaran, M.H. & A. Ullah & T. Yamagata (2008), “A bias-adjusted LM test of error cross section independence”, Econometrics Journal, 11, 105-127.
  • Puthucherril, T.G. (2010), From Shipbreaking to Sustainable Ship Recycling: Evolution of A Legal Regime, BRILL.
  • 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., & 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: The Handbook of Maritime Economics and Business (2nd ed), 217-234.
  • Toda, H.Y. & Yamamoto, T. (1995), “Statistical inference in Vector Autoregressions with Possibly Integrated Processes”, Journal of Econometrics, 66, 225–250.
  • Umar, M., & Dahalan, J. (2016), “An Application of Asymmetric Toda-Yamamoto Causality on Exchange Rate-Inflation Differentials in Emerging Economies”, International Journal of Economics and Financial Issues, 6(2), 420-426.
  • UNCTAD (2018), Demolition Statistics, <https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=89492>, 18.07.2018.
  • Xie, Z. & S.W. Chen (2014), “Untangling the causal relationship between government budget and current account deficits in OECD countries: Evidence from bootstrap panel Granger causality”, International Review of Economics & Finance, 31, 95-104.
  • Yin, J., & Fan, L. (2018), “Survival Analysis of the World Ship Demolition Market”, Transport Policy, 63, 141-156.

Çelik Fiyatının Gemi Hurdası Fiyatlarına Etkisi: Gelişmekte Olan Ülkeler Heterojen Panelinden Bulgular

Year 2019, Volume: 27 Issue: 42, 227 - 240, 31.10.2019
https://doi.org/10.17233/sosyoekonomi.2019.04.12

Abstract

Bu çalışmada, küresel çelik fiyatlarıyla, gelişmekte olan ve dünyadaki başlıca 5 gemi söküm merkezleri olan Bangladeş, Çin, Hindistan, Pakistan ve Türkiye’deki gemi hurda fiyatları arasındaki nedensellik ilişkisi incelenmektedir. Çalışmada heterojenliği ve yatay kesit bağımlılığını dikkate alan bootstrap Granger panel nedensellik analizi kullanılmaktadır. Çalışmada kullanılan veri seti 8 Ocak 2013 ve 16 Temmuz 2018 tarihleri arasını kapsayan haftalık bazda 289 gözlemden oluşmaktadır. Çalışmanın sonucunda çelik fiyatından hurda fiyatlarına bir bütün olarak nedensellik ilişkisi tespit edilmiştir ve Bangladeş dışındaki tüm ülkelerin hurda fiyatlarına bireysel olarak nedensellik ilişkileri olduğu belirlenmiştir.

References

  • Açık, A. & S. Başer (2019), “Price Volatility Spillover in Ship Demolition Markets”, Optimum Ekonomi ve Yönetim Bilimleri Dergisi, 6(2), 311-322.
  • Açık, A. & 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. Ö. (2018a), “Navlun Oranlariyla Gemi Söküm Fiyatlari Arasindaki İlişki”, Uluslararası Ticaret ve Ekonomi Araştırmaları Dergisi, 2 (1), 16-32.
  • Açık, A. & 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, <http://www.atheniansa.gr/>, 20.09.2018.
  • Bildirici, M. E., & Turkmen, C. (2015), “Nonlinear Causality Between Oil and Precious Metals”, Resources Policy, 46, 202-211.
  • Bloomberg Data Platform (2018), China Steel Prices, <https://www.bloomberg.com/professional/>, 18.07.2018.
  • Buxton, I. L. (1991), “The Market for Ship Demolition”, Maritime Policy & Management, 18 (2), 105–112.
  • Chang, T. & R. Gupta & R. Inglesi-Lotz & B. Simo-Kengne & D. Smithers & A. Trembling (2015), “Renewable energy and growth: Evidence from heterogeneous panel of G7 countries using Granger causality”, Renewable and Sustainable Energy Reviews, 52, 1405-1412.
  • Dogan, E. & A. Aslan (2017), “Exploring the relationship among CO 2 emissions, real GDP, energy consumption and tourism in the EU and candidate countries: Evidence from panel models robust to heterogeneity and cross-sectional dependence”, Renewable and Sustainable Energy Reviews, 77, 239-245.
  • Emirmahmutoglu, F. & N. Kose (2011), “Testing for Granger causality in heterogeneous mixed panels”, Economic Modelling, 28(3), 870-876.
  • Evans, J. (1989), “Replacement, Obsolescence and Modifications of Ships”, Maritime Policy and Management, 16(3), 223-231.
  • Fisher, R.A. (1932), Statistical methods for research workers, (4 th edition), Edinburgh: Oliverand Boyd.
  • Giuliodori, D. & Rodriguez, A. (2015), “Analysis of the Stainless Steel Market in the EU, China and US Using Co-Integration and VECM”, Resources Policy, 44, 12-24.
  • Hadri, K. (2000), “Testing for stationarity in heterogeneous panel data”, The Econometrics Journal, 3(2), 148-161.
  • Im, K.S. & M.H. Pesaran & Y. Shin (2003), “Testing for unit roots in heterogeneous panels”, Journal of Econometrics, 115(1), 53-74.
  • Jugović, A., Komadina, N. & 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”, Maritime Policy Management, 43(8), 1021-1035.
  • Kar, M. & S. Nazlioglu & H. Agir (2011), “Financial Development and Economic Growth Nexus in the MENA Countries: Bootstrap Panel Granger Causality Analysis”, Economic Modelling, 28(1-2), 685-693.
  • Karlis, T. & Polemis, D. (2016), “Ship Demolition Activity: A Monetary Flow Process Approach”, Scientific Journal of Maritime Research, 30, 128-132.
  • Kaya, Y. (2012), “Basel ve Hong Kong Sözleşmeleri Bağlamında Gemi Söküm Endüstrisi: Çevre, Sağlık ve Güvenlik Odaklı Bir Analiz”, “İş, Güç" Endüstri İlişkileri ve İnsan Kaynakları Dergisi, 14 (4), 71-88.
  • Knapp, S., Kumar, S.N. & Remijn, A.B., (2008), Econometric Analysis of the Ship Demolition Market, Maritime Policy&Management, 32 (6), 1023–1036.
  • Menyah, K. & S. Nazlioglu & Y. Wolde-Rufael (2014), “Financial Development, Trade Openness and Economic Growth in African Countries: New Insights from a Panel Causality Approach”, Economic Modelling, 37, 386-394.
  • Merikas, A., Merika, A. & Sharma, A. (2015), “Exploring Price Formation in the Global Ship Demolition Market”. In: 2015 Annual Meetings.
  • Mikelis, N.E. (2007), “A Statistical Overview of Ship Recycling”, In: Paper Presented at the International Symposium on Maritime Safety, Security and Environmental Protection, Athens, Greece.
  • 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.
  • Pesaran, M.H. (2004), “General diagnostic tests for cross section dependence in panels”, Cambridge: University of Cambridge, Working Papers in Economics No. 04350435.
  • Pesaran, M.H. & A. Ullah & T. Yamagata (2008), “A bias-adjusted LM test of error cross section independence”, Econometrics Journal, 11, 105-127.
  • Puthucherril, T.G. (2010), From Shipbreaking to Sustainable Ship Recycling: Evolution of A Legal Regime, BRILL.
  • 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., & 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: The Handbook of Maritime Economics and Business (2nd ed), 217-234.
  • Toda, H.Y. & Yamamoto, T. (1995), “Statistical inference in Vector Autoregressions with Possibly Integrated Processes”, Journal of Econometrics, 66, 225–250.
  • Umar, M., & Dahalan, J. (2016), “An Application of Asymmetric Toda-Yamamoto Causality on Exchange Rate-Inflation Differentials in Emerging Economies”, International Journal of Economics and Financial Issues, 6(2), 420-426.
  • UNCTAD (2018), Demolition Statistics, <https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=89492>, 18.07.2018.
  • Xie, Z. & S.W. Chen (2014), “Untangling the causal relationship between government budget and current account deficits in OECD countries: Evidence from bootstrap panel Granger causality”, International Review of Economics & Finance, 31, 95-104.
  • Yin, J., & Fan, L. (2018), “Survival Analysis of the World Ship Demolition Market”, Transport Policy, 63, 141-156.
There are 38 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Mehtap Tunç 0000-0002-0653-5079

Abdullah Açık 0000-0003-4542-9831

Publication Date October 31, 2019
Submission Date March 22, 2019
Published in Issue Year 2019 Volume: 27 Issue: 42

Cite

APA Tunç, M., & Açık, A. (2019). The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries. Sosyoekonomi, 27(42), 227-240. https://doi.org/10.17233/sosyoekonomi.2019.04.12
AMA Tunç M, Açık A. The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries. Sosyoekonomi. October 2019;27(42):227-240. doi:10.17233/sosyoekonomi.2019.04.12
Chicago Tunç, Mehtap, and Abdullah Açık. “The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries”. Sosyoekonomi 27, no. 42 (October 2019): 227-40. https://doi.org/10.17233/sosyoekonomi.2019.04.12.
EndNote Tunç M, Açık A (October 1, 2019) The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries. Sosyoekonomi 27 42 227–240.
IEEE M. Tunç and A. Açık, “The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries”, Sosyoekonomi, vol. 27, no. 42, pp. 227–240, 2019, doi: 10.17233/sosyoekonomi.2019.04.12.
ISNAD Tunç, Mehtap - Açık, Abdullah. “The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries”. Sosyoekonomi 27/42 (October 2019), 227-240. https://doi.org/10.17233/sosyoekonomi.2019.04.12.
JAMA Tunç M, Açık A. The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries. Sosyoekonomi. 2019;27:227–240.
MLA Tunç, Mehtap and Abdullah Açık. “The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries”. Sosyoekonomi, vol. 27, no. 42, 2019, pp. 227-40, doi:10.17233/sosyoekonomi.2019.04.12.
Vancouver Tunç M, Açık A. The Impact of Steel Price on Ship Demolition Prices: Evidence from Heterogeneous Panel of Developing Countries. Sosyoekonomi. 2019;27(42):227-40.