An analysis of potential firm survival within the Alabama and Mississippi shrimp fishery

Two different vessels are evaluated under alternative scenarios of replacement and no replacement of the vessel The older vessel’s ability to survive in the industry is determined by its annual cash flow. When forced to replace the vessel there is 88 percent chance of bankruptcy. The newer vessel has a greater potential for borrowing based on the value of the vessel and therefore a greater potential for success in the industry. The analysis prediets an exodus of older vessels from the industry and survivability linked to the ability to minimize the costs of operation.