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Capital Structure in the Global Shipping Industry

Author

Listed:
  • Cristian Paun
  • Vladimir Topan

Abstract

The current economic crisis emerged from a particular financial crisis that started in the United States and being rapidly propagated all over the world. It did not affect a limited region or a limited economic sector. This crisis induced significant changes in all management areas, including financial management. This study is focused on financing strategies adopted by shipping companies during the crisis, analyzing relevant factors for a specific issue - the capital structure. The research methodology proposed for this analysis on relevant factors that could explain the capital structure of shipping is OLS regression applied on selected variables derived from the financial statements of the major shipping companies. The dependent variables reflecting capital structure are book value to total liabilities ratio and book value to total debt ratio. The explanatory variables are derived from the theory of capital structure. This study empirically illustrates the relevance of the capital structure theory for the studied economic sector and is a useful tool for the shipping companies, providing relevant information about the optimal capital structure adopted by shipping companies and about factors that influence this decision during a crisis period. Key words: Financial management in shipping companies, Financing decision, Independence and dependence hypothesis, Optimal capital structure.JEL: D24, G31, G32, L62.

Suggested Citation

  • Cristian Paun & Vladimir Topan, 2016. "Capital Structure in the Global Shipping Industry," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(3), pages 359-384.
    • Handle: RePEc:voj:journl:v:63:y:2016:i:3:p:359-384:id:30
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    File URL: https://panoeconomicus.org/index.php/jorunal/article/view/30/28
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    Cited by:

    1. Berk YILDIZ, 2024. "Validity of Capital Structure Theories in the Shipping Industry: An Application on U.S. Equity Markets," Sosyoekonomi Journal, Sosyoekonomi Society, issue 32(60).

    More about this item

    Keywords

    Financial management in shipping companies; Financing decision; Independence and dependence hypothesis; Optimal capital structure;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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