Reuben Kyle

Technological Change and the Production of Ocean Shipping Services

This paper presents results for the estimation of a translog variable profit function for the subsidized U.S. liner shipping industry. In a study of fifteen firms for the period from 1971 through 1982, the estimation results for a translog variable profit function indicate an industry characterized by input-saving technological changes in the cargo-handling input and important scale economies that increase in extent over the period. At the beginning of the period, the U.S. liner shipping industry included fifteen subsidized firms and several unsubsidized firms. At this writing, four subsizied firms and one unsubsidized firm remain. The technological changes examined here and the diffusion of that technology throughout the international shipping industry are major factors in explaining that dramatic restructuring.

A Switching Regime Approach to Measuring the Effects of Technological Change in Ocean Shipping

Abstractthis study examines the dramatic change in production technology of the U.S. ocean liner shipping industry over the period 1971 through 1982 using panel data on 15 subsidized U.S.-flag liner firms. To estimate the changes in the production function due to the new technology, the switching regime method of Goldfeld and Quandt is applied to a translog variable profit function. Three regimes based on the proportion of the new technology reflected in a firms fleet are identified. The constant returns to scale fleet size more than doubles across the three regimes.

Dating structural changes: An illustration from financial deregulation

Recent developments in econometrics emphasize the importance of testing for structural breaks in time series analysis. The typical event study of financial economics examines abnormal stock market returns around arbitrarily established dates. The paper has two objectives. The first aim is to present an application of the switching regression methodology to date structural changes in the return-generating function of financial firms. The second objective is to assess the effectiveness of the conventional event methodology in dating regime shifts associated with regulatory changes in the financial services industry. (JEL C52, G21)