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http://dx.doi.org/10.38121/kpea.2022.3.38.3.29

Analyzing the Impact of Emission Control Area (ECA) Enforcement on Ferry Companies' Financial Performance : Network SBM DEA and BTR model  

Lee, Suhyung (인하대학교 물류전문대학원)
Lim, Hyunwoo (인하대학교 아태물류학부)
Publication Information
Journal of Korea Port Economic Association / v.38, no.3, 2022 , pp. 29-51 More about this Journal
Abstract
The International Maritime Organization (IMO) designated the Emission Control Area (ECA) in Northern Europe to reduce the NOx and SOx emissions from ships in the coastal areas. This study used Network slack-based measure (SBM) Data Envelopment Model (DEM) and Bootstrop Truncated Regression (BTR) model to analyze the ECA's impact on ferry companies' financial performances based on the financial data from eight ferry carriers in Northern Europe, the Mediterranean and North America from 2004 to 2017. To alleviate the problem of arbitrary variable selection in DEA, the variable selection criteria proposed by Dyson et al. (2001) were applied; the size of the company was considered through the Network SBM DEA model; and the company's profit-generating process was divided into stages to measure financial performance in more detail. In addition, the BTR model was applied to derive results that minimize the bias of the data. The study found that ECA regulations did not always negatively affect the shipping companies' financial performance. Rather, a steady increase in efficiency was observed for Northern European ferry companies which were subject to the strongest regulations. For North American ferry companies, government subsidies were found to have a significant impact on efficiency, and relatively small impact on efficiency due to the ECA and oil prices. For the Mediterranean ferry companies, efficiency values have decreased since the implementation of ECA regulation despite the lowest level of regulation in the region.
Keywords
Ferry; Environmental regulation; Emission Control Area(ECA); Financial Performance; Efficiency; Network Slack Based Measure (SBM) Data Envelopment Analysis (DEA); Bootstrap Truncated Regression(BTR);
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Times Cited By KSCI : 1  (Citation Analysis)
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