Operational efficiency of shipping companies: evidence from Malaysia, Singapore, the Philippines, Thailand and Vietnam

• Main Authors: Venkadasalam, Saravanan, Mohamad, Azhar, Sifat, Imtiaz Mohammad
• Format: Article
• Language: English; English; English
• Published: Emerald Group Publishing Ltd. 2020
• Subjects: HG4001 Financial management. Business finance. Corporation finance.
• Online Access: http://irep.iium.edu.my/84729/1/84729_Operational%20efficiency%20of%20shipping%20companies.pdf; http://irep.iium.edu.my/84729/2/84729_Operational%20efficiency%20of%20shipping%20companies_WoS.pdf; http://irep.iium.edu.my/84729/3/84729_Operational%20efficiency%20of%20shipping%20companies_SCOPUS.pdf; http://irep.iium.edu.my/84729/; https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082177968&doi=10.1108%2fIJOEM-07-2019-0493&partnerID=40&md5=1df756ae93313763bc778e28cc4421b4; https://doi.org/10.1108/IJOEM-07-2019-0493

Purpose: This paper is the first comprehensive investigation of the shipping industry's efficiency in five countries from the ASEAN region: Malaysia, Singapore, the Philippines, Thailand and Vietnam. Design/methodology/approach: Employing Data Envelopment Analysis and Stochastic Frontier Analysis, this paper compares efficiency dynamics of 45 international and offshore shipping providers engaged in fishing and ferrying. Findings: The results indicate consistently diminishing efficiency from 2011 to 2017, a phenomenon that persists even in the traditionally efficient companies. Thereafter, this paper develops Altman Z-scores for the sampled companies and notice that despite rising inefficiency, most firms remain unencumbered by bankruptcy concerns, especially those with large capital buffers. Research limitations/implications: In general, this paper observes a negative relationship between bankruptcy risk and efficiency. Furthermore, the paper notices that reducing inputs does not help boost efficiency. Originality/value: In terms of novel contributions, this paper is the first (to the best of knowledge) to set a Z-score for the ASEAN-based shipping companies. © 2020, Emerald Publishing Limited.