The Empirical Analysis On The Relationship Between Transportation And Economy In China: A Cointegration Approach

The relationships between transportation and economy in China are analysedfrom the supply and the demand in this paper using the concepts of cointegration anderror correction model (ECM).The supply includes mileage of transport routes.Thedemand includes numbers of motor vehicles, demands of passenger and freighttransport.Applying cointegration to the relationship between mileages of transport routesand economy, we find that mileages of highways have a cointegration relationshipwith the economy, but this relationship doesn't go for the mileages of railways andeconomy.For numbers of motor vehicles, both passenger vehicles and trucks have acointegration relationship with the economy.To freight transport, an ECM is constructed based on integration, which describesthe adjustment process of the tonne-kilometer to the long-run equilibrium. The resultssuggest that all parameters estimated are of the expected sign and that the uniquelong-run relationship exits among the tonne-kilometer, the index of the industrialproduction and the price. The industrial production is the main factor of influencingthe freight transport which is expected to grow at the same speed according to theindustry. The freight performances are relatively inelastic to price changes too. TheECM not only fits the actual well, but also maintains overall stability.As to the passenger transport, an ECM is constructed based on integration. Thenthe recursive OLS along with Chow test is used to analyze its stages. The resultssuggest that the unique long-run relationship exits among the passenger-kilometers,GDP, the ratio of urban population to total population and price. Economy andpopulation play an important role in the passenger performances. The passengerperformances are relatively inelastic to price changes. In the short-run, the factorseffecting on the demands of the passenger transport have changed remarkably since1990 and the ECM of different ages give more clear explanation of the change.