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Factors influencing the choice of flag: empirical evidence

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  • Angela Bergantino
  • Peter Marlow

Abstract

The aim of this paper is to analyse the decision-making process of shipowners when adopting flags of registration. More specifically, it is interested in examining the relative importance of the factors related to an individual company's decision to flag out. The decision to change flag is viwed as similar to any other strategic decision by a profit maximizing firm (shipping company) and therefore those variables which influence the attractiveness, for a given firm, of taking the flagging out decision are analysed. The approach is two-fold in that it employs both qualitative and quantitative analysis. The research is innovative in the sense that it uses an econometric approach and the analysis is based on original data which has been obtained by the authors via a questionnarie and personal interviews with members of the UK shipping industry. The results deal with two particular sectors namely the tanker and general cargo markets and provide an insight into the magnitude and significance of various factors which affect the choice of flag. It is able to provide indications of the likelihood of a particular vessel being flagged out under different cirumstaces and, further, to consider how changes in these circumstances might affect the probability of the event occuring. The paper is structured in six parts comprising an introduction, back ground, methodology, qualitative analysis, econometric analysis, and conclusions.

Suggested Citation

  • Angela Bergantino & Peter Marlow, 1998. "Factors influencing the choice of flag: empirical evidence," Maritime Policy & Management, Taylor & Francis Journals, vol. 25(2), pages 157-174, January.
    • Handle: RePEc:taf:marpmg:v:25:y:1998:i:2:p:157-174
    DOI: 10.1080/03088839800000026
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    Citations

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    Cited by:

    1. Maria I. Chondrokouki & Andrianos E. Tsekrekos, 2022. "Freight rate volatility and flag-switching decisions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 395-414, June.
    2. Yin, Jingbo & Fan, Lixian & Li, Kevin X., 2018. "Second ship registry in flag choice mechanism: The implications for China in promoting a maritime cluster policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 152-165.
    3. Anna, Merika & Anna, Triantafyllou & George, Zombanakis, 2019. "Wage and tax competitiveness: The case of Hellenic shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 255-270.
    4. Kummer, Sebastian & Dieplinger, Maria & Fürst, Elmar, 2014. "Flagging out in road freight transport: a strategy to reduce corporate costs in a competitive environment," Journal of Transport Geography, Elsevier, vol. 36(C), pages 141-150.
    5. Fan, Lixian & Luo, Meifeng & Yin, Jinbo, 2014. "Flag choice and Port State Control inspections—Empirical evidence using a simultaneous model," Transport Policy, Elsevier, vol. 35(C), pages 350-357.
    6. Brooks, Mary R. & Hodgson, J.Richard, 2004. "5. The Fiscal Treatment Of Shipping: A Canadian Perspective On Shipping Policy," Research in Transportation Economics, Elsevier, vol. 12(1), pages 143-171, January.
    7. Stelios Panagiotou & Helen Thanopoulou, 2019. "Tonnage tax revisited: the case of Greece during a shipping crisis and an economic crisis period," Working Papers 266, Bank of Greece.
    8. Olaf M. Merk, 2020. "Quantifying tax subsidies to shipping," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 22(4), pages 517-535, December.
    9. Mitroussi, Kyriaki & Arghyrou, Michael G., 2016. "Institutional performance and ship registration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 85(C), pages 90-106.
    10. Meifeng Luo & Sung-Ho Shin & Young-Tae Chang, 2017. "Duration analysis for recurrent ship accidents," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(5), pages 603-622, July.
    11. Miller, Dana D. & Sumaila, U. Rashid, 2014. "Flag use behavior and IUU activity within the international fishing fleet: Refining definitions and identifying areas of concern," Marine Policy, Elsevier, vol. 44(C), pages 204-211.
    12. Manolis Kavussanos & Siri Pettersen Strandenes & Helen Thanopoulou, 2022. "Special issue: ends of eras and new beginnings: twenty-first century challenges for shipping," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 347-367, June.
    13. Manolis G. Kavussanos & Andrianos E. Tsekrekos, 2011. "The Option to Change the Flag of a Vessel," Chapters, in: Kevin Cullinane (ed.), International Handbook of Maritime Economics, chapter 3, Edward Elgar Publishing.

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