SPOUDAI - Journal of Economics and Business

5-13

Authors: Hercules E. Haralambides, Helen Thanopoulou

Cyclicality in shipping is inherent. However, the speed and amplitude of market changes, since the fateful collapse of Lehman brothers in 2008 - distinguishes this particular crisis from most previous cycles. Predictions and investment moves made until immediately before the crisis have, in retrospect, been proven erroneous. The same applies to many of freight rate forecasts made subsequently. Yet, the information for deciphering market signals was already there in the critical months before the crisis, the authors argue. The paper demonstrates that if investors had relied on certain very simple indices of over-investment in new ships, they would have concluded that the advent of an inflexion point was unavoidable. A market turn should have been anticipated even if favourable demand developments were to continue undisrupted. Indices such as the ratio of orderbook to the existing fleet had deviated manifold from their long-term average since the previous major cycle. The authors conclude that the nature of this last cycle, akin in many respects with the origins and course of the crisis of the 1970s and the 1980s was determined more by what Metaxas called in 1971 «endemic tendency to over-invest». JEL Classification: E32; F170; E37. Keywords: shipping cycles; international trade; freight market forecasts.

40-49

Authors: Evangelos Sambracos, Marina Maniati

The world financial crisis has resulted in the slowdown of Greek economy leading to the recession of certain sectors, like Passenger Shipping. Factors, such as the decrease of private consumption and GDP, have negatively influenced Passenger Shipping, resulting in the reduction not only of the relevant demand, but also of the sector’s financial results. The paper examines the current situation of Greek Passenger Shipping during this “crisis” period. Financial analysis of the sector has indicated that companies face many problems; annual turnover decreases, reduced profit margins and deteriorating liquidity ratios, while the relevant financial ratios are worse than the corresponding ones of the Greek Economy on average. Considering the role of passenger shipping in combination with the particularity of the Greek insular area (many islands connected primarily with mainland and among them through sea transport), the paper examines and evaluates possible solutions, in order for the passenger companies to survive and keep providing their vital services. JEL Classification: R11; G01 Keywords: Financial Crisis; Passenger Shipping; Financial Analysis.

5-15

Authors: Jason Angelopoulos, Constantine Chlomoudis, Eustratia Dalvadani

The part of the port industry that serves international trade flows, competes and satisfies demand with global characteristics. Port services production and supply, within an open market, can only be governed by global regulations, and should be taken into account by those who wish to implement them. International organizations influence both safety aspects and the protection of professional life from new working methods in ports. Assessing the importance of labor factor in ports, it is argued that it constitutes a key factor in port production. Several factors have facilitated the gradual substitution of port manual labor, leading to changes in both requirement in skilled labor quantity, but also labor skill and quality requirements. Studying the three I.L.O. conventions pertaining to dock work (C032, C137 and C152) we argue that they can form a positive model for the integration of work rules on a global scale. Main aim of these conventions is the mutual development for all port stakeholders and prevention of unfair competition. We assess the current state of acceptance and degree of implementation of the Conventions by national governments, and argue for the mutual benefits for port stakeholders arising from their implementation, from the perspective of globalization governance, in the era of post – globalization. JEL Classifications: R41; J28; M54. Keywords: ILO Conventions; Port labor; dock work; global regulations.

29-41

Authors: Chara Theodoraki

Several studies have focused on the relationship between the R2 and the firm value. They have tried to explain how different values of R2 affect the firm value. In this paper we examine this relationship for the Greek companies listed on the Greek Stock Exchange, analyzing a sample of 135 listed companies for the 2004-2010 period. The results reveal that R2 is inversely related to the firm value. This is consistent with the model of Dow and Gorton (1997). Moreover, we found that companies with high R2 have significantly higher returns than those with low R2, over a two year period time, which is inconsistent with the findings of Stowe and Xing (2011). Moreover, this research shows that the investment decisions are likely to be based more on investor psychology rather than an analysis of firm-specific information. JEL Classification: G11, G12, G14. Keywords: R2; firm value; Tobin’s Q; long run performance.

53-62

Authors: Ioannis Vogiatzis, Costas Siriopoulos, Nikolaos Frangos

This paper presents the results of the actuarial valuation method Projected Unit Credit (“benefits/years of service”) in order to assess the effects of the public sector downsizing on real economy and social security in Greece, using a prototype data set. We found a social security loss of about 1.3 bn.€, and the effect on the GDP is estimated -13.6 bn.€ (or -7%). We also report a decrease in the direct income by 6.1 bn.€. JEL classifications: C58; H55. Keywords: Projected Unit Credit Method, Public Sector Downsizing, Pensions, Social Security

5-14

Authors: Metin Taylan

Ship recycling is an important sector which interests many engineering disciplines such as naval architecture, environmental, metallurgical etc. Ship recycling, on the other hand, raises a lot of concerns since it is directly related to human safety and health and environmental pollution. There have been strict rules and regulations issued by the international authorities such as IMO, ILO and the others. This paper deals with the current status of ship recycling in Turkey and all over the world in terms of statistics, rules and regulations, immediate and long term impact on the environment and shipbuilding industry. An elaborate statistical analysis has been carried out by considering various aspects. A comparative study which would offer valuable information to shipbuilders, environmental agencies, national and international authorities was also undertaken. JEL Classifications: J8; L5; Q2. Keywords: Ship recycling; Scrap metal; Hong-Kong Convention; Asbestos.

26-36

Authors: Ioannis Dagkinis, Nikitas Nikitakos

The equipment maintenance strategy is one of the factors influencing the safety and overall operational management of the ship. Using the wrong maintenance strategies can waste time, money, and resources, and often has no effect on improving or maintaining availability of equipments. Thus the reliability of the ship is reduced, and the risks and the probability of failures increased. The aim of this paper is to show one approach to the risk evaluation from equipments maintenance strategy of the ship. The paper describes main characteristics of Maintenance Strategies where the impact on safety is crucial and a model for evaluation of its risk. The model is based on the application of the Analytic Hierarchy Process method. The developed model uses subjectivity, experience and knowledge, when determining significance of selected risk elements in relation to total safety and risk. JEL Classification: C670; C830. Keywords: Maintenance Strategy; Ship Safety; Multi Decision Criteria Making; AHP.

51-59

Authors: Aristotelis B. Alexopoulos

It has been accepted that when an area or zone has been approved as being particularly sensitive, some specific measures against maritime activities and environmental issues can be adopted for monitoring and control. Marine zones have been used around the world as an important resource management tool. They can help protect sensitive natural resources from overuse, separate conflicting visitor uses and preserve the variety of marine life, or biodiversity, of an area. A Particularly Sensitive Sea Area (PSSA) is an area that needs special protection through action by IMO because of its significance for recognized ecological or socio-economic or scientific reasons and which may be vulnerable to damage by international maritime activities. However, the criteria for the identification of particularly sensitive sea areas and those for the designation of special areas are not mutually exclusive. The relevant conventions both at the international and regional level (UNCLOS, MARPOL, Barcelona) have detailed provisions dealing with such zones or areas. Even the Exclusive Economic Zone has been used as a semi-ecological zone by some states when shipping activities are involved. This paper will investigate the current situation in the Mediterranean Sea, specifically what kind of protection zones and other marine protection areas are established but create problems in terms of multiple uses and different users, and then discuss and propose a basis-network of zoning that is consistent with international law, to be functioning in the Eastern Mediterranean, particularly in Greek waters. JEL Classification: K33; Q58; R41. Keywords: Sensitive Areas; Ecological Zones; Shipping; Pollution; Greek Seas.

75-82

Authors: Maria Progoulaki, Aikaterini Katradi, Ioannis Theotokas

Seafarers' welfare is becoming a major issue for the international maritime community. This paper aims at examining the effect of welfare interventions onboard and ashore in the development and promotion of seafarers’ well-being. For this, it analyses the theoretical context of welfare and its aspects concerning the shipping industry. The paper is based on the results of a qualitative survey among ten Greek-owned shipping companies that manage a total fleet of more than 430 vessels. Literature review and results of the field further existing knowledge on provision of crew welfare facilities and services, as well as on the role of various stakeholders involved in the provision of such facilities. Analysis also focuses on the examination of current conditions. The paper also examines the way the Maritime Labor Convention standards are met by the industry stakeholders, discusses possible gaps that need to be filled and proposes actions for policy makers. This article introduces the research agenda in the field of welfare and well-being in the shipping industry. The present analysis contributes to our understanding on crew welfare and well-being and offers a base of dialogue on the different areas they affect. JEL Classifications: J81; I38; K31. Keywords: Crew welfare; welfare services and facilities; seafarers; well-being; research agenda.

102-112

Authors: Eda Turan, Yasin Ust

In recent years, sustainability is the core concern of industries and companies take actions to protect the environment. In this context, there are also several new regulations in the shipping industry. The Energy Efficiency Design Index (EEDI) has been developed and adopted by the International Maritime Organization (IMO) as an amendment to MARPOL Annex VI. According to EEDI, the energy efficiency of ships is defined as the ratio of the mass of CO2 emissions from main, auxiliary engines and additional shaft per unit of transport work for a particular ship design. Other regulations are Energy Efficiency Operational Indicator (EEOI) and Ship Efficiency Management Plan (SEEMP) to be applied to existing vessels. In this study, design data for 84 tankers smaller than 25000 DWT built in Turkish Shipyards between 2009 and 2012 is utilized to calculate and compare their attained EEDI values against the values of the EEDI baseline designated for tankers. The results indicate that most of the delivered vessels do not meet the current EEDI baseline and new vessel designs will be soon necessary for achieving EEDI compliance. This study can also be extended to the application of EEOI with the provision of accurate vessel operational characteristics. JEL Classifications: Q40; Q56; Z00. Keywords: Energy Efficiency; Shipping; Environmental Management; Emission.

128-136

Authors: Constantine Chlomoudis, Petros A. Kostagiolas

Nowadays, decision making in maritime transportation includes information for obligatory or not regulations related to quality, safety and security. Decisions of this nature have a significant effect on the actual cost of quality, safety and security in maritime transport. Although regulatory information is important, it is rather fragmented due to the internationalized nature of maritime operations as well as because it involves various private and public sector standardization agencies. In that respect, the development of an integrated maritime information service is essential in order to reduce costs and in turn improve maritime transportation services, streamline the flow of commerce as well as aid in developing better international, regional and national schemes. This paper initially provides two methodologies for estimating the cost of quality/safety/security and thereafter discusses the importance of managing regulatory material and information. Thereafter, a review of the literature is taking place and some innovative initiatives are presented, e.g. the “Maritime Knowledge Centre” of International Maritime Organization (IMO). Finally, a rationale will be proposed for the development of an integrated information service in order to provide a suitable and reliable information-knowledge based framework for quality, safety and security in maritime transportation. The implications resulting from the development of such a framework is discussed together with its significance for managing the relevant information. JEL Classification: R41; L15; D83. Keywords: information services; maritime transport; quality; safety; security; regulations; standards.

146-157

Authors: Nikolaos P. Ventikos

The aim of this paper is to present aspects of the implemented statistical analysis and patterns of the recorded maritime fire accidents. In this context, a focused database was created taking into account the specific sources for the data available; hence, the data was collected from selected cruise/passenger operators which provided information regarding the events of ignition, and generally smaller or bigger fires which took place onboard vessels. A key achievement of this effort is the healing of the usual problem of underreporting of fire accidents; in particular, underreporting small fires in relative (commercial) databases is a common problem in drawing reliable and usable risk related conclusions. However, the results presented in this paper are based upon a rather complete set of fire records providing this way for reality reflecting results and error free conclusions. Based on this database, the paper presents the results derived by statistical analysis which are able to provide patterns and trends of fires onboard passenger and cruise vessels. Furthermore, information about actually recorded occurrences/frequencies in relation to fire ignition and fire development is also included. This approach allows exploring, in a quantitative manner, the issue of fires for the examined fleet by giving specific figures regarding the frequency of events per ship-year, and the expected number of events per year. Finally, a series of tests is performed to identify whether the recorded patterns and relationships are statistically significant observations or whether they are solely attributable to chance. The paper concludes with insights drawn from the aforementioned topics. JEL Classifications: R41; L91; Y1. Keywords: maritime fire accidents; cruise/passenger vessels; ignition; statistical analysis; risk; hypothesis tests.

172-180

Authors: Nikolaos P. Ventikos, Dimitrios I. Stavrou

The significant development of Ship to Ship (STS) transfer of cargo operations originates from different operational and trading reasons and factors, all of which however in the context of optimizing the distribution plan between the source and the final consumers (markets). The transferred cargo can be either petroleum products, or liquefied gases (LPG, LNG), or even some dry bulk cargoes. The IMO resolution, MEPC 186(59)/2009, gives to tanker vessels the full operational responsibility of an STS operation of petroleum products. To reduce the possibility of a potential accident with severe effects, risk assessment is necessary for the evaluation of the hazards embedded in the procedures and to prevent the occurrence of mishaps during STS transfers by taking additional control measures. The aim of this paper is to describe the latest developments related to STS transfer cargo procedures and moreover to scrutinize on the implementation of risk assessment in the context of optimizing the procedures. It is intended to determine the factors that can affect the operations; accidents that happened in the past are presented in order to investigate the parameters that should be considered as lessons learned to avoid similar unpleasant situations in future activities related to STS operations. JEL Classification: R41; P41; Q51. Keywords: Ship to Ship (STS) transfer; risk assessment; STS plan; regulations; transshipment.

7-30

Authors: Marinos Stefanitsis, Irene Fafaliou, Joseph Hassid

In this paper, we examine the financial literacy, thus the financial behaviour of 352 Greek households. In turn, we compare our findings with results from a similar survey we conducted on an equivalent sample of small and medium-sized enterprises (SMEs). Our aim was to realise if there is any link between financial knowledge and behaviour in each surveyed micro-system and, further, indicate similarities and differences between them. Ιt is argued that the sample of households make better use of financial knowledge than the surveyed SMEs. Further, even in cases where financial knowledge was of high performance, both groups did not perform accordingly in terms of their financial behaviour. Such results indicate the complexity of the relationship between knowledge and behaviour. JEL classification: L20, D10, D22 Keywords: Households; small and medium-sized enterprises; financial knowledge; financial behaviour; Greece.

47-74

Authors: Constantina Kottaridi, Fragkiskos Filippaios, Marina Papanastassiou, Robert Pearce

This paper develops a new conceptualization of the relationship between regional determinants and roles of foreign subsidiaries and empirically investigates this relationship in the UK at a disaggregated regional level. It focuses particularly on a relatively under- investigated field, that of the linkage between choice of regional location -within a particular host country- and subsidiary roles. The key contribution steaming from this analysis is the development of the Asset Specificity Framework (ASF) combining regional characteristics with distinctive types of subsidiaries. This framework is further examined providing detailed support for our allegations. The external environment impacts differently on subsidiary types, with agglomeration features playing the most significant role. At the same time though, idiosyncratic Foreign Direct Investment (FDI) aspects do seem to exert the most important influence for these types of subsidiaries. Interesting policy implications may then be raised regarding the design of well-targeted FDI promoting policies, aiming at upgrading regional potential on one hand and pursue the attraction of specific sectors and companies on the other. JEL Classification: F23, L20, R10 Keywords: UK Regions, subsidiaries’ roles, regional mix, location choice, agglomeration.

94-99

Authors: Nickolas J. Michelacakis

It is shown that, in pure exchange economies, the individual demand functions can be recovered from the equilibrium set regardless of the way we evaluate wealth. Following Balasco (2004), the demand functions do not have to be differentiable, not even continuous nor utility maximizing. Thus, the set of equilibria does not necessarily carry the structure of a manifold. Further, it is proved that the inner product structure is redundant in the sense that the result holds true even if wealth is being evaluated by means of a more general function on the price commodity space satisfying minimal requirements. JEL Classification: D50, D51 Keywords: Equilibrium set (manifold), Demand functions.

121-132

Authors: Anokye M Adam

This study investigates the effect of currency union membership on foreign direct investment inflow to ECOWAS subregion. The study employed panel dynamic ordinary least square (DOLS) to estimate a panel data of fifteen ECOWAS countries from 1995 to 2010 with the framework of the gravity model. The result indicates a positive effect of a currency union on FDI inflow to ECOWAS, which shows that the presence of a currency union is likely to increase FDI by 46%. The control variables; political constraint, current account and trade openness is significant in explaining FDI inflow to ECOWAS. The implications of the findings are that currency union positively influences the flow of FDI into ECOWAS region, and this requires stable political environment, financial and trade openness. It goes to suggest that adoption of common currency should go with these factors to maximize the benefit of currency union membership in the region. JEL Classification: F15, F21, F30 Keywords: Currency Union, Foreign Direct Investment, Gravity Model and DOLS