Data: Exploring spillover effects in the four shiiping markets: Evidence from asymmetric connectedness

This paper aims at assessing the extent of connectedness (integration) across the four shipping markets (freight, secondhand vessels, newbuilding, and scrap) for three different segments of the industry (bulkers, oil tankers, and LNG vessels). We use monthly data for the period 1990 to 2023. The innovation of our study is that we examine the asymmetric connectedness of the four shipping markets following Stopford’s (2009) shipping market integration theory. We find strong patterns of asymmetric integration across the four markets, with the spillover effects being higher at the tails of the conditional distribution. We corroborate prior literature, finding that the freight market is overall the strongest net spills provider and consequently the dominant market among the four shipping markets. The only exception is the freight market for LNG vessels, where the secondhand market becomes partially dominant, due to the RAP model (shipping paradox). The scrap market is proven to be a net spills provider, while the secondhand and newbuilding markets appear to be interconnected, with the former acting as a net transmitter to the latter. Finally, our dynamic analysis provides evidence that the shipping market integration is affected by spillover effects from exogenous shocks arising from the pandemic, the war in Ukraine and the related government interventions to counterbalance the adverse implications for economies globally. Our findings contribute to the decision-making process in both ship and asset management.