The option to change the flag of a vessel

摘要: The objective of this paper, in recognition the strategic significance ship registration decision, is to provide a theoretical framework that helps explain interaction factors influence decisions register 'flag convenience.' This highlights risk-return trade-off at its core. A decision problem formulated as switching option under assumptions uncertainty and costly reversibility. It shown likelihood timing registry can be affected by uncertainties over level savings tax labour costs accrue from 'flagging-out,' well correlation vessel's operation with market portfolio. authors' model shows optimal flag-switching policy for maritime firm influenced number offers practical method assessing available alternatives fleet registration.