Favourable funding conditions: friend or foe of shipping M&As?

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dc.authorid0000-0002-2039-7872
dc.contributor.authorGulnur, Arman
dc.contributor.authorAntypas, Nikolaos
dc.date.accessioned2026-02-12T21:05:09Z
dc.date.available2026-02-12T21:05:09Z
dc.date.issued2023
dc.departmentBursa Teknik Üniversitesi
dc.description.abstractFunding conditions do not remain the same. The corporate finance literature documents that variations in funding conditions, for instance in the form of shifts in interest rates, affect banks' and firms' access to capital, as well as investors' security pricing behaviour. The high levels of leverage in the shipping industry make it particularly susceptible to fluctuations in funding conditions, exerting a significant impact on shipping companies' investment decisions. In this paper, we examine the link between funding conditions and investment quality in the shipping industry, focusing on mergers and acquisitions (M&As). We employ the event study methodology to obtain acquirer returns around M&As announcement dates, and multivariate regression to reveal the link between M&As and funding conditions. By using 352 completed acquisitions announced by international shipping companies between 1987 and 2020, we find that shipping companies engage in less value-creating deals in favourable funding conditions; a finding that supports the capital rationing theory. We report that a unit increase in our measure of funding conditions, on average, reduces shareholder value by 1.2% during the deal announcement window. Higher profitability moderates the negative effect of favourable funding conditions on shareholder value. Uncertainty of economic policies in acquirer's nation is associated with even lower deal quality during times of favourable funding conditions, emphasising the inseparable relationship between the economic landscape and shipping. The paper contributes to the shipping M&As literature by showing that the macroeconomic environment can have a great impact on the outcomes of M&A deals, as well as company and deal characteristics. The paper offers several policy implications for shipping companies with M&As intentions, shipping investors, and banks that support shipping.
dc.description.sponsorshipThe authors would like to thank the Editor-in-Chief and anonymous reviewers for their constructive comments that help improve the quality of this paper.
dc.description.sponsorshipThe authors would like to thank the Editor-in-Chief and anonymous reviewers for their constructive comments that help improve the quality of this paper.
dc.identifier.doi10.1057/s41278-023-00272-y
dc.identifier.endpage754
dc.identifier.issn1479-2931
dc.identifier.issn1479-294X
dc.identifier.issue4
dc.identifier.scopus2-s2.0-85175606800
dc.identifier.scopusqualityQ1
dc.identifier.startpage728
dc.identifier.urihttps://doi.org/10.1057/s41278-023-00272-y
dc.identifier.urihttps://hdl.handle.net/20.500.12885/6826
dc.identifier.volume25
dc.identifier.wosWOS:001092109100001
dc.identifier.wosqualityQ2
dc.indekslendigikaynakWeb of Science
dc.indekslendigikaynakScopus
dc.language.isoen
dc.publisherPalgrave Macmillan Ltd
dc.relation.ispartofMaritime Economics & Logistics
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_WoS_20260212
dc.subjectShipping finance
dc.subjectMergers and acquisitions
dc.subjectFunding conditions
dc.subjectFreight rates
dc.subjectEconomic policy uncertainty
dc.titleFavourable funding conditions: friend or foe of shipping M&As?
dc.typeArticle

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