“…Papapostolou et al (2014) use the earnings yield as a market valuation proxy to construct a shipping sentiment index and, in turn, argue that a high earnings-yield ratio serves as a contrarian indicator for future shipping conditions. The latter argument is in line with Greenwood and Hanson (2015) but also with Papapostolou et al (2017) who use the PE ratio (that is the inverse of the earnings yield) as a valuation-specific metric to examine herd behaviour in the decision to invest in new or retire existing fleet capacity in the dry bulk shipping industry.…”
We examine the relation between vessel prices, net earnings and holding period returns in the dry bulk shipping industry. In doing so, we provide a framework for pricing shipping assets, with finite economic lives and also subject to wear and tear. Shipping earnings yields negatively forecast future net earnings growth while there is no consistent evidence of time-varying risk premia. We provide an economic interpretation for the obtained results and argue that the investment decisions of shipowners affect the current price of the asset through the expected cash flow stream, thus implying cash flow predictability.
“…Papapostolou et al (2014) use the earnings yield as a market valuation proxy to construct a shipping sentiment index and, in turn, argue that a high earnings-yield ratio serves as a contrarian indicator for future shipping conditions. The latter argument is in line with Greenwood and Hanson (2015) but also with Papapostolou et al (2017) who use the PE ratio (that is the inverse of the earnings yield) as a valuation-specific metric to examine herd behaviour in the decision to invest in new or retire existing fleet capacity in the dry bulk shipping industry.…”
We examine the relation between vessel prices, net earnings and holding period returns in the dry bulk shipping industry. In doing so, we provide a framework for pricing shipping assets, with finite economic lives and also subject to wear and tear. Shipping earnings yields negatively forecast future net earnings growth while there is no consistent evidence of time-varying risk premia. We provide an economic interpretation for the obtained results and argue that the investment decisions of shipowners affect the current price of the asset through the expected cash flow stream, thus implying cash flow predictability.
“…• Proposed model captures flexibly the drybulk market behavior • Long-run freight rate and volatility have an impact on the investment timing and value • A high opportunity cost is embedded in the investment decision due to construction lags Papapostolou et al (2017) Investigation of the impact of herding behaviour in the dry bulk segment 233 monthly observations 1996-2015…”
Section: Resultsmentioning
confidence: 99%
“…Focusing on the herding behaviour of shipping investors, Papapostolou et al (2017) explore the impact of shipowners' behaviour in shipping investments by quantifying unintentional and intentional herding. 27 The authors analyse data on newbuilding and scrap tonnage for the period 1996-2015 and report that ordering and scrapping decisions are largely the result of unintentional herding.…”
Section: Behavioural Biases and Shipping Investmentsmentioning
Financing shipping related investment projects has always been a focal area of debate and research within the international maritime industry since access to funding can determine the competitiveness of a capitalintensive business as well as its success or failure under adverse market conditions. This paper provides, for the first time, a comprehensive and structured survey of all published research in the area of shipping finance and investment. The review spans approximately four decades (1979-2018) of empirical evidence, including 162 studies published in 48 scholarly journals, complemented with select books and book chapters. The study provides a bibliometric analysis and comprehensive synthesis of existing research offering an invaluable source of information for both the academic community and business practice, shaping the future research agenda in shipping finance and investment. JEL Code: G10, G20, G30.
“…Technical obsolescence of older equipment also increases the challenge of preventing and containing errors and exacerbates the unpredictability of maintenance in older vessels (Papapostolou et al. ). Thus, we hypothesize that identifying and reporting errors become less (more) effective in reducing unplanned maintenance in older (newer) vessels. H 4 : Vessel age weakens the negative effect of no‐blame error reporting on unplanned maintenance.…”
L ittle is known about the mechanism of how workplace safety may affect operational disruptions manifested as unplanned maintenance in commercial vessels. Building upon the high reliability organization theory as a broad framework, we propose that workplace safety climate influences how employees identify and report errors at work. Specifically, no-blame error reporting mediates the relationship between safety climate and unplanned maintenance in vessels. Additionally, we posit that the mediation effect varies among vessels in that it is stronger (weaker) in newer (older) vessels that are easier (harder) to maintain operationally. We test the moderated mediation framework at the vessel level of analysis using an archival survey data with multiple responses from 1,169 crewmembers in 86 marine vessels. Our results lend support to the mediation effect in that safety climate facilitates no-blame error reporting, which subsequently reduces the frequency of unplanned maintenance. In particular, the effect of safety climate on unplanned maintenance is fully mediated by no-blame error reporting. As vessel owners attempt to maximize their return on investments in aging ships, the mediation effect shows a high level of safety climate in a vessel is indirectly associated with a significantly lower level of unplanned maintenance rate relative to a similar age vessel but with an average level of safety climate. However, the mediation effect weakens as a vessel ages. This study contributes to important insights into how safety climate can reduce operational disruptions (unplanned maintenance events) through error reporting behaviors, contingent upon the age of ocean carriers in logistics companies.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
