Characterising investments in EU fisheries and defining their desirability

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).