Authors: Y.H. Venus Lun, K.W. Pang, Photis M. Panayides
Addresses: Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, 11 Yuk Choi Road, Hung Hom, Kowloon, Hong Kong. ' Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, 11 Yuk Choi Road, Hung Hom, Kowloon, Hong Kong. ' Department of Commerce, Finance and Shipping, Faculty of Management and Economics, Cyprus University of Technology, P.O. Box 50329, 3603 Limassol, Cyprus
Abstract: Firms buy factor inputs in the factor market and sell value-added outputs to customers in the product market. Firms also engage in economic exchanges along and across the value chain. The combination of these value-adding and exchange functions determine a firm|s performance. This paper examines how the factor and product markets are related to organisational capacity and firm performance in the container shipping industry. The findings revealed that the price on the product market is positively related to the production capacity of the industry. This study also illustrates the relationship between firm size and level of vertical expansion for carriers to own ships rather than charter ships from the factor market. A regression equation model is developed to predict the level of ordering new ships by ocean carriers. This study tests the relationship between organisational capacity and firm performance, shedding light on the profitability of ocean carriers.
Keywords: factor markets; product markets; organisational capacity; firm performance; international container shipping; firm growth; production capacity; firm size; ship ownership; vertical expansion; ocean carriers; profitability.
International Journal of Shipping and Transport Logistics, 2010 Vol.2 No.2, pp.206 - 223
Published online: 10 Jan 2010 *Full-text access for editors Access for subscribers Free access Comment on this article