Economies of scale in Greek coastal shipping. A survivor analysis

Abstract

Although Greek coastal shipping is a very important shipping industry, there are not a lot of scientific efforts calculating economies of scale and minimum optimal firm size in the past. In our opinion, Stigler’s survivor technique is the best-fitted method for researching these issues. It examines the configuration of companies’ sizes over time and argues that only the companies with the lowest long-term average costs will survive in a market. Methodologically, we divided coastal companies into size classes regarding the number of employees per company and the contribution of companies per size class to gross production value, gross added value, and revenue without vat. Then we checked the statistical significance of changes in market share distribution. The analysis led to the conclusion that economies of scale exist in Greek coastal shipping and the minimum firm size pertains to the employment of 20-49 employees or the operation of two ships per shipping company.