The Financing of Italian Shipping Firms

Abstract

Bank financing has traditionally been the most prominent source of external finance in shipping industry. The maritime transport sector has undergone numerous changes due to both the economic growth of the emerging countries and the legislative response following the financial crisis (Basel 3). In particular, the tightening on capital adequacy has produced a banking disengagement in terms of loans to the sector that has led to changes in the financing of shipping business. The present paper examines the composition and the dynamics of the mix of alternative forms of financing of Italian shipping firms. The analysis focuses on a sample of 500 Italian companies active in the maritime transport sector between 2007 and 2015. The analysis is aimed at analyse the response in the maritime sector to the trend of banks “disengagement” and compares it with the international trend. The results show that the response to bank disengagement should be better articulated since all alternative forms of financing are not widely used, in particular the stock and bond market suffer of very low volume and intensity. The benefits deriving from the diversification of the mix of alternative forms of financing should be object of further studies especially in the field of risk management.