Flag home bias: measuring ship registry choice with portfolio theory and decomposing flagging out in the Turkish-owned merchant fleet, 2014–2026
Bayrak yerlilik yanlılığı: gemi sicili tercihinin portföy kuramıyla ölçülmesi ve Türk sahipli ticaret filosunda bayraktan kaçışın ayrıştırılması, 2014–2026
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Abstract
The flag under which a country's nationals operate their ships is a key indicator of its capacity to be a maritime nation; yet the literature studies this choice at ship level and as a national–foreign dichotomy, and offers no measure that is comparable across countries. This study proposes four methodological innovations: a flag home-bias index that adapts the home-bias measure of international portfolio theory to ship registration; a logarithmic mean Divisia decomposition that splits the change in nationally flagged tonnage without residual; a three-component shift-share analysis that separates the change in the registry portfolio into fleet growth, the global registry trend and a country-specific shift; and a maximum-entropy flow matrix that estimates net registry transfers from aggregated data alone. The methods are applied to UNCTAD's flag-by-beneficial-ownership matrix for 35 owner countries over 2014–2026. While the Turkish-owned fleet grew from 28.9 million DWT to 47.7 million DWT, Turkish-flagged tonnage fell from 8.3 million DWT to 6.3 million DWT; the home-bias index dropped from 0.284 to 0.140, and Türkiye fell from 18th to 26th among 35 countries. Fleet growth could have added 3.6 million DWT to the Turkish flag, whereas the fall in the retention rate removed 5.6 million DWT. The shift cannot be explained by the global trend: while the Maltese flag held its share worldwide, Turkish owners withdrew 12.7 million DWT from this registry in a country-specific shift, and while Panama declined worldwide, Turkish-owned tonnage moved towards it. 40.7% of the registry portfolio changed. The problem is not fleet investment but the competitiveness of the registry.
Keywords
Flagging out; Ship registry; Home bias; LMDI decomposition; Shift-share analysis; Maximum entropy; Turkish merchant fleet
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