Oil price shocks and the financial performance patterns of logistics service providers

Research output: Contribution to journalArticleScientificpeer-review

Researchers

Research units

  • University of St. Gallen
  • University of Turku

Abstract

This paper examines the influence of oil price shocks on the financial performance of logistics service providers. By applying the structural vector auto regression (SVAR) methodology to the data of 301 logistics service providers (LSPs) from 2004 to 2014, based on annual and half-yearly report data (in total 6020 firm-years), it is shown that oil price changes are absorbed in a variety of ways by different types of companies. Fluctuations in oil prices negatively affect the transportation industry – with minor restrictions in asset-light clusters and companies which consume little to no oil. Our analysis also shows that oil price shocks result in effects of different magnitude and length with respect to the type of LSP. Thus, some LSP clusters adapt quicker to oil price changes than others and are better able to absorb price shocks. An innovative approach is applied to examine LSP performance; SVAR, a widespread model in economics, is used to analyse the LSP sector. The results are important for financial planning of the management of different LSP types as well as their customers.

Details

Original languageEnglish
Pages (from-to)290-306
Number of pages17
JournalEnergy Economics
Volume72
Publication statusPublished - 1 May 2018
MoE publication typeA1 Journal article-refereed

    Research areas

  • Clusters, Logistics service providers, Macroeconomic shocks, Oil price development, Structural vector auto regression

ID: 19960333