Integration of shipbuilding markets : a quantitvative study of the newbuilding prices for bulk carriers, tankers and containerships from 1994 to 2015
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- Master Thesis 
This thesis investigates whether the newbuilding prices for bulk carriers, tankers and fully cellular containerships (FCC) are joined in a mutual long-run equilibrium, and thus providing evidence of an integrated shipbuilding market for these shipping segments. By using hedonic pricing models, we construct newbuilding price indices that represent the underlying determinants of price. This method enables the creation of objective indices that control for ship- and contract-specific characteristics, in addition to shipyard and ship owner heterogeneity. Further, the Johansen method is applied to study the existence of cointegration. The findings of the analysis suggest that newbuilding prices are joined in collective long-run equilibria through the existence of two cointegrating relationships. This supports a view of flexible shipyard capacity, indicating that the product ultimately offered in the shipbuilding markets for bulk carriers, tankers and FCCs is capacity. Consequently, newbuilding prices may be affected by the opportunity cost of available shipyard capacity, providing an explanation for the existence of an integrated market.