Explaining variations in national fleet across shipping nations

Many studies on national shipping attribute declines in national fleets in developed economies to lack of comparative advantage, but little has been done so far to identify factors contributing to comparative advantage of national shipping using a systematic approach. On the other hand, although shipping is highly international and shipping markets are highly competitive, it is not clear whether tonnage owned by nationals of countries is governed by country-specific factors. This paper seeks to explain variations in tonnage of national fleet across shipping nations. The main variable of interest is national fleet tonnage owned by country of domicile as opposed to registered tonnage. The results of econometric analysis using data of 84 shipping nations indicate that various country-specific factors do indeed contribute to variations in fleet tonnage across shipping nations, albeit at various levels of significance. Financial market development, external trade, ship registration, shipbuilding, and shipping history appear to be the most significant impacts followed by the development and technological level and maritime policy. Based on the results of analysis, the Shipping Competitiveness Index is computed, and implications are discussed.