City Research Online

Identifying shipowners’ risk attitudes over gains and losses: Evidence from the dry bulk freight market

Giamouzi, M. and Nomikos, N. ORCID: 0000-0003-1621-2991 (2020). Identifying shipowners’ risk attitudes over gains and losses: Evidence from the dry bulk freight market. Transportation Research Part E: Logistics and Transportation Review, doi: 10.​1016/​j.​tre.​2020.​102129

Abstract

This study examines the risk-return trade-off in the dry bulk freight market under different scenarios such as risk measures, risk attitudes and controlling for variables associated with the freight rate cycle. For long-term contracts, there exists a negative association between risk and return, suggesting that shipowners are willing to offer a discount on time-charter rates over spot rates to compensate for the loss of flexibility. Additionally, shipowners are not uniformly risk averse, as finance theory suggests, since their utility functions are concave (risk-averse) for losses and convex (risk-seeking) for gains.

Publication Type: Article
Additional Information: © 2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords: Risk Preferences, Prospect Theory, Risk-Return Relationship, Dry-bulk Freight Market, Utility Functions
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HE Transportation and Communications
H Social Sciences > HG Finance
Departments: Business School > Finance
Date Deposited: 29 Oct 2020 10:58
URI: https://openaccess.city.ac.uk/id/eprint/25165
[img] Text - Accepted Version
This document is not freely accessible due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

To request a copy, please use the button below.

Request a copy

Export

Downloads

Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login