Abstract
In most economic sectors, increases in capital (i.e., investments) are often considered virtuous, indicating confidence in the future and expected growth. In fisheries, however, investments are often harmful, as they may lead to increases in fleet capacity, which is not desirable considering the fully exploited or overexploited status of most fish stocks (natural capital), and the dissipation of the resource rent (overcapitalisation). In the EU, the number of fishing vessels have been decreasing for many years, but the fishing capacity is often claimed to have increased. In other words, there are less vessels, but the remaining ones have a higher fishing capacity. In this study, we analyse the evolution of the EU fishing industry’s investments for the period 2008–2016, and whether these investments have been beneficial. Results show that despite the overall decrease in the number of vessels and their average value, investments in some fleets have increased. Moreover, investment decisions (i.e., whether to invest or disinvest) have been more accurate in recent years, leading to a better economic performance. However, results vary by the scale of the fishing activity (small-scale and large scale fleets) and sea basin (Northeast Atlantic Ocean and Mediterranean Sea).
Highlights
The possibility to increase individual profits by increasing inputs beyond the level required to achieve the maximum economic yield (MEY), leads to the existence of overcapacity in poorly-managed fisheries, and of overcapitalisation, depletion of the fish stocks and dissipation of the resource rent (Clark, 1990; Pauly et al, 2002; Berkes et al, 2006; Willman et al, 2009; Worm et al, 2009)
We propose to use Net Value Added (NVA), the sum of the returns to both capital and labour, as a measure of profitability as it is generally regarded as a better means of defining the returns to society than using profits alone (Chen et al, 2005; Guillen et al, 2015)
Most of the capital increases in the fleet are due to increases in the average value per vessel
Summary
The possibility to increase individual profits by increasing inputs beyond the level required to achieve the maximum economic yield (MEY), leads to the existence of overcapacity in poorly-managed fisheries, and of overcapitalisation, depletion of the fish stocks and dissipation of the resource rent (Clark, 1990; Pauly et al, 2002; Berkes et al, 2006; Willman et al, 2009; Worm et al, 2009). Managing fisheries worldwide at MEY or at maximum sustainable yield (MSY) would require drastic reductions in existing fishing capacity (Clark, 1990; Pauly et al, 2002; Willman et al, 2009; Sumaila et al, 2012; Merino et al, 2014; Guillen et al, 2016). The link between capital and investment theories in the fisheries sector has been further reviewed, (see for instance, Greboval and Munro, 1999; Charles, 2007)
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