The relative efficiency and financial risk assessment of shipping companies Academic Article uri icon


  • 2014, 2014 Taylor & Francis. Since shipping companies are highly competitive, we ask whether financial risk assessment tools impact company performance and, therefore competitiveness and efficiency. Stochastic Frontier Analysis (SFA) is used in the evaluation. Based on distinct features of the risk-return relationship, three cargo segments in the shipping industry are studieddry bulk, liquid bulk, and containerized cargo. The influence of the risk assessment indicators on market and operational efficiency is subsequently determined using a panel regression to determine whether different asset allocation and risk management techniques improve the performance of shipping companies. In this analysis, 79 international shipping companies listed in Bloomberg Shipping Indices are included in the data collected from Thomson One for the period of 20012010. Efficiency estimation from the SFA shows that containerized cargo firms have better performance in both market and operating efficiencies. Operating efficiency performance is achieved by lowering liquidity. Market efficiency is improved by well-managed leverage level.

published proceedings

  • Maritime Policy & Management

author list (cited authors)

  • Wang, G., Woo, S., & Mileski, J.

citation count

  • 33

complete list of authors

  • Wang, Grace WY||Woo, Su-Han||Mileski, Joan

publication date

  • November 2014