We examine the corporate cash holdings of listed shipping companies. Shipping firms hold more cash than similar firms in other asset-heavy industries. Higher cash holdings in the shipping industry are not attributable to firm- or country-level characteristics, but rather to the higher marginal value of cash. Shipping firms value an additional dollar of cash higher than matched manufacturing firms, regardless of their financial constraints status, but depending on their cultural background and the cyclicality of their expansion opportunities. Less procyclical shipping firms have a higher marginal value of cash, and this valuation effect is most pronounced in bad times of the business cycle when external capital supply tends to become scarce. Overall, it appears that shipping companies are more conservative than their peers in managing their cash positions.
Nikos Nomikos is Professor of Shipping Risk Management at Cass Business School. He commenced his career at the Baltic Exchange as Senior Market Analyst where he was responsible for the development of the shipping indices that are currently used in the market as pricing benchmarks. For the last 10 years he has been with the Faculty of Finance at Cass Business School, where he is also the Director of the MSc course in Shipping, Trade and Finance, a leading postgraduate program that attracts high calibre graduates from around the world. His area of expertise is Ship Finance and Risk Management. As such, he particularly enjoys lecturing on the topics of shipping economics, ship finance and shipping risk management as well as quantitative finance and risk management in financial and commodity markets. Nikos has collaborated with a number of companies both as consultant as well as educator in executive training programmes. Some of the companies include AP Moeller Maersk, the Baltic Exchange, Boston Consulting Group, Clarksons, Far East Trading/Sinochem, Korean Banking Institute, Overseas Shipholding Group and TBS Shipping Services. He also holds visiting faculty positions in Copenhagen Business School, University of Geneva and International Hellenic University where he lectures on topics such as Insurance and Risk Management, Shipping Trading and Finance and Energy and Power Markets Trading & Risk Management. He was appointed as “The Wilmar Professor in International Commodity Business” for 2013 at the Singapore Management University. He is also a regular speaker in a number of practitioner seminars and symposia such as the Financial Times Investment Series Seminars, London Biennial Meetings, The Freight Derivatives Annual Seminars and Energy Risk Europe. Nikos has published his research in numerous academic and practitioners journals. He has published more than 40 papers in international academic journals such as Review of Finance, Energy Economics, Energy Policy, Transportation Research, Journal of Banking and Finance, Applied Mathematical Finance, Journal of Futures Markets, Journal of Derivatives, Logistics and Transportation Review etc. He has also published numerous book chapters and has co-authored the book “Shipping Derivatives and Risk Management” which is considered the leading reference book in the area of Shipping Risk Management. His views about commodity and shipping markets have also been profiled in a number of newspapers and other media such as International Herald Tribune, NY Times, Financial Times, Lloyd’s List, Tradewinds, Bloomberg, CNBC news, Daily Telegraph etc. Nikos holds a BSc in Economics from Athens University of Economics and Business, an MSc in Shipping, Trade & Finance (Distinction) from Cass Business School and a PhD in Finance from Cass Business School. He is also a Member of the Institute of Chartered Shipbrokers."