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The economic importance of the Straits of Malacca and Singapore: An extreme-scenario analysis

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  • Qu, Xiaobo
  • Meng, Qiang

Abstract

This paper proposes a decision tree model to estimate the loss to global economy on the hypothesis of an extreme scenario of blockade of the Straits of Malacca and Singapore. The insurance surcharges, inventory costs and the time values of cargoes, and Time Charter Equivalent rate are used to estimate the psychological loss, the loss to industries, and the loss to carriers, respectively. Interestingly, there is a pseudo-paradoxical phenomenon with respect to the loss to carriers. An illustrative example is also provided to explain the “Malacca Paradox”.

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  • Qu, Xiaobo & Meng, Qiang, 2012. "The economic importance of the Straits of Malacca and Singapore: An extreme-scenario analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 258-265.
    • Handle: RePEc:eee:transe:v:48:y:2012:i:1:p:258-265
    DOI: 10.1016/j.tre.2011.08.005
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    1. Kenneth E. Train & Clifford Winston, 2007. "Vehicle Choice Behavior And The Declining Market Share Of U.S. Automakers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1469-1496, November.
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    4. Shintani, Koichi & Konings, Rob & Imai, Akio, 2010. "The impact of foldable containers on container fleet management costs in hinterland transport," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(5), pages 750-763, September.
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    Cited by:

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    3. Zhang, Liye & Meng, Qiang & Fang Fwa, Tien, 2019. "Big AIS data based spatial-temporal analyses of ship traffic in Singapore port waters," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 287-304.
    4. Wang, Hua & Zhang, Yiru & Meng, Qiang, 2018. "How will the opening of the Northern Sea Route influence the Suez Canal Route? An empirical analysis with discrete choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 75-89.
    5. Chong, Heap-Yih & Lam, Wei-Haur, 2013. "Ocean renewable energy in Malaysia: The potential of the Straits of Malacca," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 169-178.
    6. Sakmani, Ahmad Safwan & Lam, Wei-Haur & Hashim, Roslan & Chong, Heap-Yih, 2013. "Site selection for tidal turbine installation in the Strait of Malacca," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 590-602.
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