Appendix 1
The dimensions of a cluster
The horizontal dimension consists of firms with similar capabilities that undertake similar activities while the vertical dimension is composed by firms with dissimilar but complementary capabilities that carry out complementary activities (Richardson 1972). Firms at the horizontal dimension are mainly competitors and rivals while at the vertical dimension firms are often collaborators and partners.
Horizontal dimension: Firms have different strengths, insights and attitudes Marshall (1890), and their different valuation and interpretation of information leads to different and dissimilar beliefs about the approaches and solutions of the same issues ( Casson 1982, von Hayek 1937). Due to the different attributes of firms it would be difficult to replicate the actions of another player. By being co-located any different action or approach is observed and can be compared by everybody. By watching and comparing the different approaches an interactive learning process takes place that improves their skills, makes even complex information understandable and increases their possibility of survival. These competing visions promote the evolution of the cluster and the economy as a whole.
An important note for the horizontal dimension is that when agents in a cluster share a common culture, language, norms or organizational practices the process of learning from each other is easier but now trust is not a prerequisite for learning. The learning activity can occur even without close interaction between firms. While at the vertical dimension the need for interaction between parts (customers-suppliers) is required there is no such need between rival firms (Allen 1983). So the only requirements for learning to take place to such clusters are the co-location and the observability of other agents’ actions and no interaction between agents is essential. A relevant issue is the existence of close and cognitive proximity between agents that we will refer to later on
Vertical dimension:‘The vertical dimension of the cluster consists of firms linked through input-output relations’ (Rosenberg 1972). Once a cluster is established, specialized suppliers (in our case APS providers) and customers (maritime companies) are attracted by the opportunities available. Another way for the vertical dimension to be developed is by the concentration of some agents to a particular process where they believe they have some advantage or special capabilities different than the other players. Our focus will be on the first approach. When firms with differentiated knowledge co-locate the bridging of the knowledge differences is easier, the problems of asymmetric information is overcame and coordination of activities is easier to be achieved. This can also lead to further specialization of the cluster as knowledge from different fields and sectors is ‘mixed’ that creates new forms of knowledge. This vertical differentiation can lead to the creation of new economic activities, extension of the internal market and new knowledge creation (Maskell 2001). However, the decrease in the possible alternative perspectives and evaluation of information can decrease the offsets of knowledge creation and even lead to lock-in effects of the cluster. Only a steady increase in the number of firms can create knowledge simultaneously by variation and that is why the increase and growth of the cluster is very essential for its survival.
Appendix 2
Competition inside the cluster: Porter’s Diamond
The concept of clusters from its nature is a paradox since it overemphasizes the advantages of co-location near other firms of the same sector or more directly near competitors. Porter (1990) argued that local competition encourages innovation by forcing firms to innovate or fail and that the competitive pressure enhances productivity. At economic literature the perspective of Marshall (1925), Arrow (1962) and Romer (1986) or MAR-perspective stands to the opposite side by claiming that a local monopoly is better for growth because it allows the externalities to be fully appropriated by the innovator. Finally there is a third approach by Jacobs (1969) that emphasized to the importance of diversity and variety inside the cluster since the most important knowledge transfers originate from outside the cluster, a theory that we referred previously in our research. In our case, the two maritime clusters of Piraeus and London have the characteristics of specialized industrial locations that is a concept that was perceived at the end of 19th century by A. Marshall 1890, that examined ‘the concentration of specialized industries in particular localities’ by creating a triangular of external economies and more specifically the availability of skilled labor, the growth of supporting trades and the specialization in different stages and branches of production. A further evolution of this framework was presented by Porter 1990 with its famous ‘competitive diamond’ where he examined the national competitive advantage and international competitiveness. He argued that the success of a nation’s firms is dependent on four sets of conditions: the firm’s strategy, structure and rivalry, factor input conditions, demand conditions and related and supporting industries. ‘The more developed and intense the interactions between these four set of factors, the greater will be the productivity of the firms concerned’. Moreover, he argued that the intensity of interaction within the ‘competitive diamond’ is enhanced if the firms involved are geographically located or clustered. In other words, the competitive diamond is a group of interlinked industries and associated activities. It is the nature of the Diamond’s concept that produces the co-location of competitive firms that can be even rivals that consequently intensifies the interactions between the different factors. However, Porter’s concept has a generic character and is deliberately vague so that it can include and explain relations among different industries and specializations. In our case nevertheless this vague character is a disadvantage since our focus of interest is on very specialized industries that would require a more restricted and defined framework. To step to that direction is to include also the regional influence on a nation’s competitive advantage as an additional dimension to the Diamond as mentioned by Rugman&D’Cruz (1992). However, the analysis cannot be restricted to the national level (Rugman &Verbeke 2001), but for national competitive advantage to occur external connections of industries should be taken into account. We created based on these observations an enhanced framework of ‘Porter’s Diamond’ presented below:
Fig.1 Modified determinants of competitive advantage inspired by (Porter 1990)
Appendix 3
The role of firm size
At this research identifying evidence on the importance of firm size of the maritime company and its choice of APS providers could not be found. However, some clues about the function of the maritime industry where identified. Small maritime firms in most cases do not choose their own APS providers (for example law firms) but for example when an incident occurs they contact their P&I Club and it is the Club that chooses according to the specific circumstances (area of the incident, cost etc) the most suitable APS provider for the case. On the other hand, larger maritime companies have internally Legal& Insurance Departments that deal with most issues related to the firm, again however with close co-operation with their P&I Club. Another relation identified concerns the relation of local P&I Clubs with local or smaller maritime companies. Since local Clubs have lower pools that are difficult to cover the liability limits of large maritime companies they target more at smaller maritime companies. However, no clues were found about what will be the choice of the maritime company, as to whether it will choose the local Club or not.
‘As mentioned when small firms have an incident they just turn to their P&I Club which contacts the insurance company and taking into account the special characteristics of the case, the cost etc they decide which law firm to choose to represent them. Larger shipping companies on the other hand have internally a Legal Dpt that when a case occurs they contact directly whom they think it will serve their interests better.’ (Interview 04/05/09).
‘Shipping companies must have a minimum type of insurance up to 1 Billion$ due to international regulations. This limit is applied to vessels operating to deep sea trade where for coastal shipping the limit is much lower. We can say that local P&I clubs have also added value to the system and that local insurance covers local firms’ (Interview 23/04/09).
Finally firm size plays important role for the decision of the company to open a branch abroad. Smaller firms appeared reluctant to open a branch at London due to the risk involved to that decision due to the high level of competition from larger, more well-connected, British firms but also due to the high costs of starting a new establishment at such an expensive location like London. However, most maritime experts recognized that firm size is not the most significant factor of success when they are at their local market but other issues like how well connected to the local network they are and also from their level of professionalization. Using a phrase of a maritime specialist that sums up the above: ‘if you cannot be big, learn how to be small’ (Interview 04/05/09). More insights are provided below:
‘It is hard for a foreign firm of our size to find clients and survive at the London market. Even though our firm in terms of size is average for Greek market standards at London we would be insignificant. Moreover London is very expensive and we cannot suffer 3-4 years of losses just to be profitable after that. The only way to do it is through personal contact and relation with their customers and by offering the same level of quality with their competitors. We should take into account that firms like ours have relations with their customers for more than 10 years, which means that they know and we know them. They will not just change lawyer because a new, large, foreign firm appeared or if another firm offers them a lower rate for a case. Trust is more important and trust is earned’ (Interview 09/05/09).
‘For a ship-owner the most important is the completion of the job but also that the job will be done correctly. So it’s a question if the locals are trustworthy and capable to undertake difficult cases. So the level of service is one aspect of the answer and of course the cost of such services. Everything leads to the level of professionalization and that is where smaller law firms should focus their efforts’ (Interview 04/05/09)
Appendix Table 3
FIRM NAME / TYPE OF SERVICES / FOUNDATION DATE / OFFICES IN LONDON / NUMBER OF EMPLOYEES-SIZEAigaion Insurance Co SA / INSURANCE / 1996 / NO / 35% OF GR. MARKET SHARE
Apostolakis Law,Constantinos L / LAW / / / / / /
Associated Marine Adjusters / LAW-ADJUSTERS / 1989 / YES / /
Associated Piraeus Law Offices / *
Athanasios AP Valsamis / LAW / / / / / /
Athanassiou & Partners, V / LAW / / / NO / /
Athanassopoulos Law Offices / LAW / / / / / /
Avrameas & Ptns Law Offices, P / LAW / 1965 / NO / /
Baltazanis, N C & Assoc / LAW / / / MANAGEMENT COMPANY OF LONDON CLUB
Bilbrough & Co - Greece / P&I CLUB / / / YES / /
Budd - Greece / P&I CLUB / / / YES / /
Charles Taylor & Co Ltd / P&I CLUB / / / YES / /
Clyde & Co - Greece / LAW/CONSULTANCY / / / YES / /
D Goulielmos & Partners / LAW / / / NO / /
Daniolos Issaias-Athens / LAW / 2006 / no / /
Deucalion Rediadis & Sons / LAW / / / BRITTANIA'S EXCLUSIVE CORRESPONDENTS
Deverakis Law Office / LAW / 1986 / NO / 5
Dimakis Law Office / LAW / 1964 / NO / 5
E A Vourvachis Law Office / LAW / / / / / /
Economou & Economou / LAW / 1975 / NO / 7
Emm J Stephanakis & Associates / LAW / / / / / /
Ethniki Hellenic Gnl Ins / INSURANCE / / / / / /
Francis & Arnold (Hellas) / ADJUSTERS / / / YES / /
Franlaw Panama Inc / LAW / / / NO / /
G & N L Daniolos - Piraeus / LAW / MERGED/NOW Daniolos Issaias & Partners Law Firm (D&I).
G E Bairactaris & Partners / LAW / / / / / /
Georgopoulos & Georgopoul / LAW / / / / / /
Geronymakis & Ptns Law Office / LAW / / / / / /
Golden Destiny Inc -Marine Ins / SHIPBROKERS / 1994 / NO / /
Goulielmos & Partners / LAW / / / NO / /
Goyios, N - A Nassikas / LAW / / / NO / /
Hill Taylor Dickinson- Piraeus / LAW / / / YES / /
Holman Fenwick - Greece / LAW / / / YES
John Howell & Co / LAW/NOW The International Law Partnership LLP / YES
Hull Mutual Association / non profit Marine Insurance Association / NO
I Savramis & Partners / LAW / / / /
Ince & Co - Greece / LAW / 1993 / YES
Interamerican / INSURANCE / / / NO / /
Joseph Tan Jude Benny - Greece / LAW / / / NO / /
Karelas Law Office / LAW / / / / / /
Karydakis & Partners / LAW / 1986 / NO / 10
Kelemenis & Co / LAW/CONSULTANCY / / / NO / /
Lallis Voutsinos Anagnos / LAW / / / / / /
Latsoudis Arvaniti Law Office / LAW / 1926 / NO / 13
Manolis Eglezos Law Offices / LAW / 1997 / NO / 14
Minimar Shipping Co Ltd / INSURANCE BROKERS / 1980 / NO / 13
Muenchener Hellas - Greece / REINSURANCE SERVICES / / / NO / /
Neris & Bonoris / LAW / 1969 / / / /
North of England P&I / P&I CLUB / / / YES / /
Norton Rose Greece - Athens / LAW / 1990 / YES / /
Pagoropoulos, John / LAW / / / / / /
Pavlakis & Partners - Piraeus / LAW / 1932 / NO / 10
Pegasus Services Ltd / ADJUSTERS / / / / / /
Pologiorgis Babalis / LAW / / / / / /
Quantum Marineworks Ltd / MARINE SERVICES / / / / / /
Reed Smith - Greece / LAW / / / YES / 8
Richards Hogg Lindley - Greece / ADJUSTERS / / / LIVERPOOL-GLASQOW / /
Rokas & Partners - Piraeus / LAW/CONSULTANCY / / / NO / /
Roussos & Hatzidimitriou / LAW / / / NO / /
Sarantitis Law Firm - Piraeus / LAW / 1965 / NO / 15
Savopoulos, George / LAW / / / / / /
Schelde Marine Svcs Hellas / SPARES / / / / / /
Scorinis Law Offices / LAW / 1969 / NO / /
Shipowners Claims Bur (Hellas) / P&I CLUB / / / YES / /
Sioufas, Theo V - Greece / LAW / 1971 / NO / 21
SKULD - Piraeus / P&I CLUB / / / NO / 9
Sotiropoulos, P K / / / / / / / /
Stephenson Harwood Consultants / SHIP FINANCE/LAW / / / YES / /
Stylianou & Stylianou / LAW / / / / / /
Swedish Club - Greece / P&I CLUB / 1980 / NO / 12
Theologidis & Lascaratos / LAW/CONSULTANCY / / / NO / /
Thomas Cooper - Athens / LAW / / / YES / /
Thomas Miller (Hellas) Ltd / P&I CLUB / / / YES / /
Timagenis, Gr J / LAW / 1977 / NO / 15
Topmar Shipping Corp SA / SHIPBROKERS / /1967 / NO / /
V & P Law Firm - Piraeus / LAW/CONSULTANCY / / / NO / /
Vardikos & Vardikos / LAW / / / NO / 7
Verveniotis, George / LAW / 1970 / NO / 8
Vlassis N Macris & Associates / LAW / / / / / /
Waterson Hicks - Piraeus / LAW / YES / /
Watson Farley & Williams LLP / LAW / / / YES / 8+5B Athens Branch
West of England (Hellas) / P&I CLUB / / / YES / /
Yiannis Papazacharia - Greece / LAW / 1988 / NO / 11, associates at UK
* No legal services are provided by the Society itself. Such services are offered by the individual law offices - members of the Society.
Appendix Table 4
Column1 / type of services / foundation date / offices in London / number of employeesAccess Maritime Corp / shipbrokers-chartering / 1984 / no / /
ACA Shipping / maritime-chartering / / / no / /
Aegean Marine Petroleum SA / bunkering / / / / / /
Afpeli Maritime Inc / shipbrokers / / / / / /
Albatros Management Inc / Broker - Chartering / / / / / /
Alexander C Mougios / / shipbroker? / / / / / /
Alkmare Shipping Agencies Ltd / maritime-chartering / / / no / /
Alliance Chartering Inc / shipbroker-chartering / / / no / /
Allied Shipbroking Inc / shipbroker-chartering / 1988 / no / /
Almay Shipping & Finance SA / shipbrokers / / / no / /
Amyntas Chartering SA / shipbroker / / / / / /
Anro Marine Enterprises SA / / / / / / / /
Athenian Shipbrokers SA / shipbrokers / 1997 / / / 15-50
Avin International SA / maritime / 1977 / yes / /
Azure Maritime Inc / shipbrokers / / / / / /
Balkanfracht Niko Kollaros / shipbrokers / / / / / /
Belnav Inc-now aquavita int / charterers / 2006 / no / 11
Billmar Chartering Co Ltd / shipbrokers / / / / / /
Brave Maritime Corp Inc / maritime company / 1987 / / / /
Bulk & Oil Chartering SA / shipbroker-chartering / / / / / /
Bulkers Shipbroking Co Ltd / shipbroker-chartering / / / / / /
Bulknav Shipping Ltd / / / / / / / /
Callitsis Successors SA / agents-chartering / / / no / 21
Carriers Chartering Corp SA / shipbrokers / / / no / /
Chester Shipping Ltd UK / maritime company / / / no / /
Chris Marine SA / shipbrokers / 1987 / no** / 8
Christoship Charter & Ship Co / Intermediaries/chartering / / / / / /
Christou Associates SA / training services / 1982 / no / /
Continental Chartering Co Ltd / shipbrokers / / / no / /
Cosmos Shipping Co SA / shipbrokers/ chartering / 1975 / no / 6
Daifas Marine Enterprises SA / shipping company / / / no / /
Dalex Shipping Co SA / shipping company / / / no / /
Dalnave Navigation Inc Libera / shipbrokers / / / no / /
Danad Shipping Co Ltd / shipping company/chartering / / / no / /
Diamond Shipbroking Ltd / shipbrokers/ chartering / / / no-Chile / /
Diamond Shipbroking Glyfada / shipbrokers/ chartering / / / no / /
Dileship Marine Corp / exporter / / / no / /
DLP Maritime SA / shipbrokers/chartering / / / no / /
Doil Steamship Co Ltd / shipbrokers / / / no / /
DP Iliou Shipbroking & Trading / shipbrokers / / / no / /
E Erhardt y Cia SA / Freight Transportation Arrangement/shipbrokers/charters / / / no / /
Eastmed Yachting Partners / yacht charterers / 1998 / no / /
Econ Shipping Co / brokers/representatives / / / no / /
Efnav Co Ltd / shipping company/chartering / / / no / /
Elefsis Shipping Agency / shipbrokers/chartering / 2002 / no / /
Eleftheroudis General Shipping / shipbrokers / / / no / /
European Co-Operation SA / shipbrokers / / / no / /
Flocas Shipping Ltd / shipbrokers / / / no / /
Florcas Shipping Agency Ltd / shipbrokers / / / no / /
Frangoulis Shipmanagement Ltd / shipping company/chartering / / / no / /
G Georgopoulos Maritime / shipping company/chartering / / / no / /
Galaxy Maritime Enterprises SA / charterers / / / no / /
Georgantzos Shipbrokers / shipbrokers / / / no / /
George Moundreas & Co SA / shipbrokers / 1975 / no / 28
Gigilinis Salvage & Towage / anchor handling/tuging/chartering / 1960 / no / 100
Grecomar Shipping Agency Ltd / shipping company / / / no / /
Grecomaritime Chartering Ltd / chartering / / / no / /
Hellastir Shipping Enterprises / shipbrokers / / / no / /
IMS SA / / / / / / / /
Inglessis & Co, Nikos / shipbrokers / / / no / /
Interchart Shipping Inc / shipbrokers/chartering / / / no / /
Intermodal Shipbrokers Co / shipbrokers / 1988 / no-China / /
International Shipbrokers Inc / shipbrokers / 1989 / no / /
International Shipping&Trading / / / / / / / /
Iolcos Hellenic Maritime Entp / shipping company/S&P / 1982 / no / 30 off-shore/160 seafarers
Ionian Shpg & Chartering Ltd / / / / / / / /
John N Pissis / shipbrokers / / / / / /
John Psarras S&P / chartering/shipbrokers / / / / / /
Kallianis Compania Naviera SA / shipping company/chartering / / / / / /
Link Maritime Enterprises SA / shipbrokers / / / / / /
Maersk Broker Hellas / shipbrokers/charterers/s&p / 2009-re-established / yes-main company / /
Marachart Shipping Co Ltd / shipping company / / / no / /
Marbrokers SA / shipbrokers / 1974 / no / /
Marine Contractors Inc / salvage contractors/shipbrokers / / / no / /
Marine Spirit SA / shipping company/chartering / 1992 / no / 5
Marteam Shipping Co / shipping brokers / / / Athens/Thes/niki / /
Master Maritime Intl Co SA / s&p brokers/ship registers / / / no / /
Masters Shipping Co SA / shipbrokers / 1965 / no / 6
Mediterranean Maritime / shipping company / / / no / /
Medstone SA / shipbrokers / / / no / /
Melka Chartering Svcs Ltd / shipbrokers/chartering / / / no / /
Mercantile Merit Shpg Co / shipping company / / / no / /
Millennium Oil Ltd / bunkerers / / / no / /
Minamar Chartering Ltd / shipbrokers / / / no / /
Mourla Mare SA / ship charterer / / / no / /
Mutual Maritime Services SA / / / / / / / /
N Cotzias (Shipping) Co / shipbrokers / 1893 / no / /
N G Moundreas Shipping Co SA / shipbrokers / / / no / /
Navatrade SA / shipbrokers / 1988 / no / /
Navigational Satellites Chart / satellite chart providers / / / no / /
Network Chartering SA / s&p brokers / / / no / /
Ocean Energy (Hellas) Ltd / bunkerers / / / no / /
Oceanbulk Shipping & Trading / shipping company/chartering / / / no / /
Oceancrest Chartering SA / shipbrokers / 2003 / no / 6
Optima Shipbrokers Ltd / shipbrokers / 1981 / Shangai/Dubai / 60
Oromaris Inc / management/s&p/chartering / 2005 / no / /
Overseas Agency Ltd / shipbrokers/s&p / 1969 / no / /
OW Bunker (Malta) Ltd / bunkering / 1992 / no / 10
P K Kakoulidis Shipping Co / shipbrokers / / / no / /
Plessot Trading SA / shipbrokers / / / no / /
Posidonia Shipping & Trading / / / / / / / /
Primal Marine Shipbrokers / shipbrokers / / / no / /
Prime Maritime Inc / shipbrokers / / / / / /
Rangos N Shipping & Trading Co / shipping company/charter/broker / / / no-Thessaloniki / /
Roussos Mngt & Chtg SA, S / shipbroker / / / no / /
S&C Besi Ltd / shipping company / / / no-Thessaloniki / /
Samos Steamship Co / shipping company/chartering / 1875 / no / /
Scandinavian Shpg Ltd / various services / / / no / /
Sea Master Ship & Trading Ltd / shipbrokers/chartering / / / no / /
Sea Pride Maritime & Trading / / / / / / / /
Seabound Maritime Inc / shipbrokers / 1993 / no / /
Seaknight Navigation Inc / shipbrokers / / / no / /
Sealink Marine Inc / / / / / / / /
Seatrade Chartering Inc / shipbrokers / / / no / /
Seawind Shipping Svcs / towages/s&p/chartering / 1992 / no / /
Shipowners Trust Intl Corp / shipbrokers/chartering/s&p/ex-imp / 1997 / no / /
Solemare Shipping Co SA / communication/it / 1973 / no / /
Stealth Maritime Corp SA / shipping company/chartering / 1999 / no / /
Stewart & Hazell Marine Svc / insurance surveying/s&p / 1982 / yes / /
Tradmar Group / chartering / 1978 / no-around Greece / /
Tramp Maritime Inc / shipbrokers / / / no / /
Transocean Shipping Co SA / chartering / / / no / /
Velikar Enterprises Ltd / exporter / / / no / /
Venieris Maritime SA / handling/auxiliary services / / / no / /
Venture Shipbroking SA / shipping company/shipbrokers / / / no / /
Vergos Marine Management SA / shipbrokers / / / no / /
Vestalco Ltd/Agency / bunkering/chartering / 1988 / no / /
Widesea Chartering Co Ltd / shipbrokers / / / no / /
TurkEllas Shipping Agencies SA / chartering/shipbrokers / / / no / /
Tween Shipping Inc / shipbrokers / / / no / /
Unit Maritime Inc / / / / / / / /
Vega Star Maritime SA / shipbrokers / / / no / /
Tsakos Group / shipping company/chartering/s&p / 1974 / yes / /
Appendix Table 5