IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v35y2014icp350-357.html
   My bibliography  Save this article

Flag choice and Port State Control inspections—Empirical evidence using a simultaneous model

Author

Listed:
  • Fan, Lixian
  • Luo, Meifeng
  • Yin, Jinbo

Abstract

Flag choice and Port State Control (PSC) inspection are two of the most important and mutually dependent aspects of shipping policy. Estimating the effects that various outside factors have on both the flagging out decision and the PSC inspection rate can help with determining appropriate policies for improving maritime safety. However, studying the impact of one on the other without taking into account their endogenous effect could result in biased estimations. This paper integrates a binary logit model for flagging out decisions, and a linear model for explaining the PSC inspection rate, in a Three-stage Least Square framework, by combining actual ship registration data from the Lloyd׳s ship register with the corresponding PSC inspection records from Paris MOU, Tokyo MOU, and India MOU. The empirical results show that PSC inspections actually increase the possibility of flag-out, not only because of the high inspection rate, but also through the variables used in setting the inspection priority, such as ship age. Estimation biases are also identified if endogeneity is neglected, such as the contribution of ship type, ship size, and PSC inspection rate to the flag-out behavior, as well as the importance of flying a foreign flag on the PSC inspection priority.

Suggested Citation

  • Fan, Lixian & Luo, Meifeng & Yin, Jinbo, 2014. "Flag choice and Port State Control inspections—Empirical evidence using a simultaneous model," Transport Policy, Elsevier, vol. 35(C), pages 350-357.
    • Handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:350-357
    DOI: 10.1016/j.tranpol.2014.04.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X1400095X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2014.04.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pierre Cariou & François-Charles Wolff, 2011. "Do Port State Control Inspections Influence Flag- and Class-hopping Phenomena in Shipping?," Journal of Transport Economics and Policy, University of Bath, vol. 45(2), pages 155-177, May.
    2. Cariou, Pierre & Mejia, Maximo Q. & Wolff, Francois-Charles, 2009. "Evidence on target factors used for port state control inspections," Marine Policy, Elsevier, vol. 33(5), pages 847-859, September.
    3. Li, K. X., 1999. "The safety and quality of open registers and a new approach for classifying risky ships," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 35(2), pages 135-143, June.
    4. Knapp, Sabine & Franses, Philip Hans, 2007. "Econometric analysis on the effect of port state control inspections on the probability of casualty: Can targeting of substandard ships for inspections be improved?," Marine Policy, Elsevier, vol. 31(4), pages 550-563, July.
    5. Kishore Gawande & Alok K. Bohara, 2005. "Agency Problems in Law Enforcement: Theory and Application to the U.S. Coast Guard," Management Science, INFORMS, vol. 51(11), pages 1593-1609, November.
    6. Metaxas, B. N., 1981. "Flags of convenience," Marine Policy, Elsevier, vol. 5(1), pages 52-66, January.
    7. K. X. Li & J. Wonham, 1999. "Who is safe and who is at risk: a study of 20-year-record on accident total loss in different flags," Maritime Policy & Management, Taylor & Francis Journals, vol. 26(2), pages 137-144, April.
    8. Angela Bergantino & Peter Marlow, 1998. "Factors influencing the choice of flag: empirical evidence," Maritime Policy & Management, Taylor & Francis Journals, vol. 25(2), pages 157-174, January.
    9. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    10. Cariou, Pierre & Mejia Jr., Maximo Q. & Wolff, Francois-Charles, 2008. "On the effectiveness of port state control inspections," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(3), pages 491-503, May.
    11. Kevin X. Li & Yulan Wang & Jie Min, 2009. "Quantitative analysis of materiality in marine insurance," Maritime Policy & Management, Taylor & Francis Journals, vol. 36(5), pages 437-455, October.
    12. Knudsen, Olav F. & Hassler, Björn, 2011. "IMO legislation and its implementation: Accident risk, vessel deficiencies and national administrative practices," Marine Policy, Elsevier, vol. 35(2), pages 201-207, March.
    13. Sabine Knapp & Philip Hans Franses, 2007. "A global view on port state control: econometric analysis of the differences across port state control regimes," Maritime Policy & Management, Taylor & Francis Journals, vol. 34(5), pages 453-482, October.
    14. Tony Alderton & Nik Winchester, 2002. "Flag states and safety: 1997-1999," Maritime Policy & Management, Taylor & Francis Journals, vol. 29(2), pages 151-162, April.
    15. Knapp, Sabine & Franses, Philip Hans, 2008. "Econometric analysis to differentiate effects of various ship safety inspections," Marine Policy, Elsevier, vol. 32(4), pages 653-662, July.
    16. Kevin X Li & Kevin Cullinane, 2003. "An Economic Approach to Maritime Risk Management and Safety Regulation," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(3), pages 268-284, September.
    17. Florens, Jean-Pierre & Foucher, Caroline, 1999. "Pollution Monitoring: Optimal Design of Inspection--An Economic Analysis of the Use of Satellite Information to Deter Oil Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 38(1), pages 81-96, July.
    18. Sage, Bénédicte, 2005. "Identification of 'High Risk Vessels' in coastal waters," Marine Policy, Elsevier, vol. 29(4), pages 349-355, July.
    19. Bell, Douglas, 1993. "Port state control v flag state control: UK government position," Marine Policy, Elsevier, vol. 17(5), pages 367-370, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meifeng Luo & Sung-Ho Shin & Young-Tae Chang, 2017. "Duration analysis for recurrent ship accidents," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(5), pages 603-622, July.
    2. Yang, Zhisen & Yu, Qing & Yang, Zaili & Wan, Chengpeng, 2024. "A data-driven Bayesian model for evaluating the duration of detention of ships in PSC inspections," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 181(C).
    3. Maria I. Chondrokouki & Andrianos E. Tsekrekos, 2022. "Freight rate volatility and flag-switching decisions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 395-414, June.
    4. Yin, Jingbo & Fan, Lixian & Li, Kevin X., 2018. "Second ship registry in flag choice mechanism: The implications for China in promoting a maritime cluster policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 152-165.
    5. Wenming Shi & Kevin X. Li, 2017. "Themes and tools of maritime transport research during 2000-2014," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(2), pages 151-169, February.
    6. Manolis Kavussanos & Siri Pettersen Strandenes & Helen Thanopoulou, 2022. "Special issue: ends of eras and new beginnings: twenty-first century challenges for shipping," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 347-367, June.
    7. Hristos Karahalios, 2021. "Contribution of PSC Authorities to Ship Accident Prevention," SN Operations Research Forum, Springer, vol. 2(1), pages 1-18, March.
    8. Wang, Shuaian & Yan, Ran & Qu, Xiaobo, 2019. "Development of a non-parametric classifier: Effective identification, algorithm, and applications in port state control for maritime transportation," Transportation Research Part B: Methodological, Elsevier, vol. 128(C), pages 129-157.
    9. Xiao, Yi & Qi, Guanqiu & Jin, Mengjie & Yuen, Kum Fai & Chen, Zhuo & Li, Kevin X., 2021. "Efficiency of Port State Control inspection regimes: A comparative study," Transport Policy, Elsevier, vol. 106(C), pages 165-172.
    10. Howell, Kerry E. & Bhattacharya, Syamantak, 2016. "Functional and territorial jurisdictions: Regulating a globalized shipping industry," Journal of Transport Geography, Elsevier, vol. 55(C), pages 92-100.
    11. Yan, Ran & Mo, Haoyu & Guo, Xiaomeng & Yang, Ying & Wang, Shuaian, 2022. "Is port state control influenced by the COVID-19? Evidence from inspection data," Transport Policy, Elsevier, vol. 123(C), pages 82-103.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graziano, Armando & Mejia, Maximo Q. & Schröder-Hinrichs, Jens-Uwe, 2018. "Achievements and challenges on the implementation of the European Directive on Port State Control," Transport Policy, Elsevier, vol. 72(C), pages 97-108.
    2. Wang, Shuaian & Yan, Ran & Qu, Xiaobo, 2019. "Development of a non-parametric classifier: Effective identification, algorithm, and applications in port state control for maritime transportation," Transportation Research Part B: Methodological, Elsevier, vol. 128(C), pages 129-157.
    3. Esma Gül Emecen Kara, 2016. "Risk Assessment in the Istanbul Strait Using Black Sea MOU Port State Control Inspections," Sustainability, MDPI, vol. 8(4), pages 1-17, April.
    4. Cariou, Pierre & Wolff, Francois-Charles, 2015. "Identifying substandard vessels through Port State Control inspections: A new methodology for Concentrated Inspection Campaigns," Marine Policy, Elsevier, vol. 60(C), pages 27-39.
    5. Xiao, Yi & Qi, Guanqiu & Jin, Mengjie & Yuen, Kum Fai & Chen, Zhuo & Li, Kevin X., 2021. "Efficiency of Port State Control inspection regimes: A comparative study," Transport Policy, Elsevier, vol. 106(C), pages 165-172.
    6. Wang, Yuhong & Zhang, Fan & Yang, Zhisen & Yang, Zaili, 2021. "Incorporation of deficiency data into the analysis of the dependency and interdependency among the risk factors influencing port state control inspection," Reliability Engineering and System Safety, Elsevier, vol. 206(C).
    7. François Fulconis & Raphael Lissillour, 2021. "Toward a behavioral approach of international shipping: a study of the inter-organisational dynamics of maritime safety," Journal of Shipping and Trade, Springer, vol. 6(1), pages 1-23, December.
    8. Nwokedi Theophilus C. & Eko-Rapheals Melvin Urhoromu & Obasi Catherine & Okechkwu Anyanwu Julius, 2022. "Performance of Abuja MOU on Port State Control in Enforcement of IMO Regulations on Maritime Safety," LOGI – Scientific Journal on Transport and Logistics, Sciendo, vol. 13(1), pages 233-244, January.
    9. Yang, Zhisen & Yang, Zaili & Teixeira, Angelo Palos, 2020. "Comparative analysis of the impact of new inspection regime on port state control inspection," Transport Policy, Elsevier, vol. 92(C), pages 65-80.
    10. Yin, Jingbo & Fan, Lixian & Li, Kevin X., 2018. "Second ship registry in flag choice mechanism: The implications for China in promoting a maritime cluster policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 152-165.
    11. Meifeng Luo & Sung-Ho Shin & Young-Tae Chang, 2017. "Duration analysis for recurrent ship accidents," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(5), pages 603-622, July.
    12. Armando Graziano & Pierre Cariou & François-Charles Wolff & Maximo Mejia & Jens-Uwe Schröder-Hinrichs, 2017. "Port state control inspections in the European Union: Do inspector's number and background matter?," Working Papers halshs-01649418, HAL.
    13. Heij, C. & Bijwaard, G.E. & Knapp, S., 2010. "Ship Inspection Strategies: Effects on Maritime Safety and Environmental Protection," Econometric Institute Research Papers EI 2010-33, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    14. Mitroussi, Kyriaki & Arghyrou, Michael G., 2016. "Institutional performance and ship registration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 85(C), pages 90-106.
    15. Yang, Zhisen & Yang, Zaili & Yin, Jingbo, 2018. "Realising advanced risk-based port state control inspection using data-driven Bayesian networks," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 38-56.
    16. Knapp, S. & Bijwaard, G.E. & Heij, C., 2010. "Estimated Incident Cost Savings in Shipping Due to Inspections," Econometric Institute Research Papers EI 2010-28, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    17. Xiao, Yi & Wang, Grace & Ge, Ying-En & Xu, Qinyi & Li, Kevin X., 2021. "Game model for a new inspection regime of port state control under different reward and punishment conditions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    18. Yang, Zhisen & Yang, Zaili & Yin, Jingbo & Qu, Zhuohua, 2018. "A risk-based game model for rational inspections in port state control," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 477-495.
    19. Bye, Rolf J. & Aalberg, Asbjørn L., 2018. "Maritime navigation accidents and risk indicators: An exploratory statistical analysis using AIS data and accident reports," Reliability Engineering and System Safety, Elsevier, vol. 176(C), pages 174-186.
    20. Heij, C. & Knapp, S., 2011. "Risk evaluation methods at individual ship and company level," Econometric Institute Research Papers EI2011-23, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:350-357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.