1.0 Introduction
1.1 Background to Study
Shipping has existed in over 5000 years and the first sea trade network we know of was between Mesopotamia, Bahrain and Indus River. Shipping is constantly changing and shipping today is far from shipping 5000 years ago. Thanks to the discovery of the global sea routs in the late fifteenth century, the industrial revolution in the late eighteenth century and the dismantling of the colonies in the second half of the twentieth century, shipping went from slow and expensive by land to a tightly knit global business community (Stopford 2008, p. 45).
Access to capital is central in building a business community like the shipping industry. High investments cost, due to highly technological vessels, require ship-owners who know how to get funding.“Because shipping is such an old industry, with a history of continuous change, sometimes gradual and occasionally calamitous, we have a unique opportunity to learn from the past.” (Stopford 2008, p. 4)
Finding out how ship-owning companies finance their investments, by using historical data and learn from past years, is the objective of this study.Hopefully, the study will provide answers to financing in the ship-owning industry.
Financing is an important stage in starting an asset-based company such as ship-owning companies. Knowledge of financing and capital can be a prerequisite for the company to create innovative products and services. The CEO of Havila Shipping said in an interview with Sysla (Aadland 2014) that it is important to maintain the maritime cluster in Norway to keep a leading position in the shipping industry.
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