How Sticky Are the Costs? Evidence from the Shipping Industry

Trying to understand how cost behaves seems to be an essential element of cost and management accounting. In this study, we examine whether costs increase more when operation rises than they decrease when operation falls by an equivalent amount. The shipping industry is taken as an empirical case to study these issues at hand, based on a selected sample of 123 publicly-listed shipping companies, over 2006-2016. The sample includes companies belonging to the three main shipping sectors, i.e. tankers, containers and dry-bulk. We applied pooled regressions, based on ordinary least squares. Each model is run for each sample and each type of cost that we have considered in our model. We have gone through several tests of cost stickiness for some types of costs and their determinants. What we have found is the presence of stickiness both for the total cost of labor and the vessel operating costs

Financial integration and portfolio investments to emerging Balkan equity markets

The study investigates the risk and return profile of international portfolios allocated by investors to major Balkan equity markets, namely Romania, Bulgaria, Croatia, Turkey, Cyprus and Greece against developed markets, Germany and the US. An error-correction vector autoregressive framework models financial integration and investigates causality effects and cointegration vectors, depicting short- and long-run dynamic linkages. The empirical findings support the presence of two cointegration vectors, indicating a stationary long-run relationship. Both domestic and external forces affect equity market behavior, leading to a long-run equilibrium. These findings are important for international asset allocation, since long-run comovements imply that risk diversification and attainment of superior portfolio returns in the Balkan equity markets may be limited for international investors, although short-run benefits may be potentially feasible in arbitrage mispricings.Market comovements Dynamic cointegration Causality effects Portfolio diversification Balkan equity markets

International portfolio diversification to Central European stock markets

The presence of short- and long-run linkages among major emerging Central European stock markets, namely Poland, Czech Republic, Hungary, and Slovakia, as well as developed markets, particularly Germany and the USA, is investigated. An error correction vector autoregressive model is estimated to detect cointegration relationships and the empirical findings support the presence of one cointegration vector, indicating a stationary long-run relationship. Both domestic and external forces affect stock market behaviour, leading to long-run equilibrium but the individual Central European markets tend to display stronger linkages with their mature counterparts rather than their neighbours. Long-run co-movements imply that diversifying risk and attaining superior portfolio returns by investing in different Central European markets may be limited for international investors.

Dynamic correlations and volatility effects in the Balkan equity markets

This paper investigates the presence of time-varying comovements, volatility implications and dynamic correlations in major Balkan and leading mature equity markets, in order to provide quantified responses to international asset allocation decisions. Since asset returns and correlation dynamics are critical inputs in asset pricing, portfolio management and risk hedging, emphasis is placed on the respective (constant and dynamic) equity market correlations produced by alternative multivariate GARCH forms, the Constant Conditional Correlation and the Asymmetric Dynamic Conditional Correlation models. The Balkan stock markets are seen to exhibit time-varying correlations as a peer group, although correlations with the mature markets remain relatively modest. In conjunction with sensitivity analysis on the asymmetric variance-covariance matrix, active portfolio diversification to the Balkan equity markets indicates to potentially improve investors' risk-return trade-off.Portfolio diversification Multivariate GARCH models Constant-dynamic conditional correlations Balkan equity markets

Chapter 6 Financing Greek Shipping: Modern Instruments, Methods and Markets

The chapter discusses ship finance and analyzes modern instruments, methods and markets that shipping companies employ to fund their investment projects. In a highly dynamic and volatile business environment, ship finance becomes highly sophisticated, innovative and complex. Emphasis is placed particularly on financial innovations employed by Greek shipping companies that rank on top of international shipping. These financing instruments include new forms of bank lending, leasing and syndication, international equity initial public offerings (IPOs), private equity funding, high-yield bond issues, securitization and forward freight agreements (FFAs).

Bank Credit Risk Management and Rating Migration Analysis on the Business Cycle

Credit risk measurement remains a critical field of top priority in banking finance, directly implicated in the recent global financial crisis. This paper examines the dynamic linkages between credit risk migration due to rating shifts and prevailing macroeconomic conditions, reflected in alternative business cycle states. An innovative empirical methodology applies to bank internal rating data, under different economic scenarios and investigates the implications of credit risk quality shifts for risk rating transition matrices. The empirical findings are useful and critical for banks to align to Basel guidelines in relation to core capital requirements and risk-weighted assets in the underlying loan portfolio

Contrarian strategy and overreaction in foreign exchange markets

This paper investigates patterns to assist investors to forecast future exchange rate movements. We test for overreaction and underreaction examining exchange rate changes following excess 1-day fluctuations for currencies in two emerging (Turkey, Brazil) and two developed (US, UK) countries. Using euro as the base currency, we identify that the Turkish lira, the Brazilian real and the US dollar overreact, while the British pound underreacts. In the case of British pound, asymmetric responses and lack of volatility are two crucial factors to reject overreaction. Also, we find that contrarian strategy can be used in all currency markets for profitable investments.