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- W2265619443 abstract "This paper quantifies the impact of demand uncertainty and time to build on prices, investment and surplus in the world bulk shipping industry. We explore the impact of both construction lags and the lengthening of delivery lags in periods of high investment activity by constructing a dynamic model of ship entry and exit. A rich dataset of second-hand ship sales provides direct information on key dynamic objects of the model and allows for their nonparametric estimation. We are able to estimate a ship's value function directly and use it to recover entry costs, scrap values and per period payoffs. We find that moving from time-varying, to constant, to no time to build reduces the level and volatility prices, while increasing entry and consumer (i.e. shipper) surplus. As the duration of time to build can be steered by shipbuilding subsidies, the findings of this paper provide also a first step in examining the impact of such subsidization programs -prevalent in China, South Korea and Japan- on the shipping industry." @default.
- W2265619443 created "2016-06-24" @default.
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- W2265619443 date "2011-01-01" @default.
- W2265619443 modified "2023-09-26" @default.
- W2265619443 title "Time to Build and Shipping Prices" @default.
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