Highly Disaggregated Models of Seaborne Trade. An Empirical Model for Bilateral Dry-Cargo Flows in the World Economy

Maritime Policy and Management, 1996, Vol. 23, No 1, 27-43

Posted: 18 Feb 2014

See all articles by Manolis G. Kavussanos

Manolis G. Kavussanos

Athens University of Economics and Business - Department of Accounting and Finance

Date Written: 1996

Abstract

The aim of this paper is to estimate an empirical model of bilateral dry-cargo seaborne import flows in the international economy. Seaborne trade elasticities are estimated for the first time, utilizing the Constant Ratio of Elasticities of Substitution Homogeneous/Homothetic (CRESH) function, a function very rarely used in the past. Highly disaggregated data on volumes of seaborne trade, published by the UN, distinguish between five types of cargo according to the type of ship used for its transportation, and 30 trading regions according to the major sea-lanes used by ships internationally. Multistage budgeting is employed to make the problem of estimation tractable. An empirical model for dry-bulk cargo is estimated based on the CRESH function. Estimation of bilateral export price elasticities enables comparison of the degree of competition in each import market over export regions, and amongst import markets themselves. Risk-averse ship owners may utilize such a comparison to operate in world shiplaneswith low degree of competition.

Suggested Citation

Kavussanos, Manolis G., Highly Disaggregated Models of Seaborne Trade. An Empirical Model for Bilateral Dry-Cargo Flows in the World Economy (1996). Maritime Policy and Management, 1996, Vol. 23, No 1, 27-43. Available at SSRN: https://ssrn.com/abstract=1435253

Manolis G. Kavussanos (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission St
TK 104 34 Athens
Greece
0030 210 8203167 (Phone)
0030 210 8228816 (Fax)

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