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INVESTMENT STRATEGY AND GREEK SHIPPING EARNINGS: EXPLORING THE PRE & POST "ORDERING-FRENZY" PERIOD

 

Zacharias G. Bragoudakis

Bank of Greece

 

Stelios T. Panagiotou

Bank of Greece

 

Helen A. Thanopoulou

University of the Aegean

 

ABSTRACT

The influx of shipping receipts from the world's leading fleet has been critical for the development of the Greek economy. Following the fateful September of 2008, the range and speed of the shift in direction of the freight rates, combined with the general economic and credit climate, have had a significant impact on Greek receipts from shipping. The paper investigates both the long and short term responses of shipping flows in the Greek balance of payments on the basis of monthly data. It also evaluates the role of the change in Greek ship-owners’ investment strategies from 2006 onwards. The paper presents estimations of the impact of freight market determinants on the shipping flows through a Greek shipping freight rate index, the loans outstanding and the second- hand vessel’s price index. The findings provide evidence in favour of a change in the investment behaviour of the Greek shipping companies after 2006. Inflows and outflows tend to be dictated partly by the cash-flow position of the companies involved in the S&P market, as indicated by the positive relationship with freight rates.

 

Keywords: Investment Strategy; Shipping Earnings; Balance of Payments; Shipping Services; Dynamic OLS; Error Correction Model.

 

JEL codes: C3, C5, F32, L91

 

Acknowledgements: The authors would like to thank H. Gibson and G. Zombanakis for their useful comments and Capt. N. Pentheroudakis for valuable insights on freight collection. The views expressed do not necessarily reflect those of the Bank of Greece.

 

  

Correspondence:

Zacharias G. Bragoudakis

Economic Research Department 

Bank of Greece

21,E.Venizelos Ave.,

102 50 Athens, Greece,

Tel. +30 210 320 3605

email: zbragoudakis@bankofgreece.gr


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