Hierarchical flow among four shipping markets: An integrated approach for capesize shipping markets

Abstract

Although there are theoretical researches on the interactions between four shipping submarkets, empirical studies examining four to cover are rare. Also, market interactions may differin positive or negative environments. Accordingly, the purpose of this study is to examine thehierarchical structure among the 4 sub-maritime markets by providing a methodologicalproposition. This study integrates the Interpretive Structural Modelling (ISM) method with theasymmetric causality analysis and examines the hierarchical structure between the four marketsin terms of positive and negative shocks through the Capesize markets. The dataset used in thestudy covers the period between 07.01.2013 - 18.07.2019 and consists of 342 weeklyobservations. The results show that the hierarchical flow of positive and negative shocks differsin the Capesize market. In terms of positive shocks, the demolition market stands out as thestarting point of the shocks, while in terms of negative shocks, freight and new building marketscome to the fore. Our study reveals hierarchical structures for maritime markets by testing theirrelationships empirically and contributes to the maritime literature where the freight market istheoretically considered a pioneer. A new methodical perspective is thought to be presented tothe maritime economics literature.