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http://dx.doi.org/10.5394/KINPR.2017.41.1.25

Analysis of the Synchronization between Global Dry Bulk Market and Chinese Container Market  

Kim, Hyun-Sok (Division of Economics, Pusan National University)
Chang, Myung-Hee (Division of Shipping Management, Korea Maritime and Ocean University)
Publication Information
Journal of Navigation and Port Research / v.41, no.1, 2017 , pp. 25-32 More about this Journal
Abstract
The purpose of this investigation is to analyze the synchronization between the representative global freight index, the Baltic Dry bulk Index (BDI) and the China Container Freight Index (CCFI) with monthly data from 2000 to 2016. Using the non-stationarity of the business cycle that is able to include common trends, we employ the Engle-Granger 2 stage co-integration test and found no synchronization. On the contrary, we additionally estimated the causality between the markets and revealed the causality, which implies that the Chinese economy has a significant effect on the global market. The results of this empirical analysis demonstrate that the CCFI of China is appropriate for analyzing the shipping industry. In practice, this means that it is more appropriate to include CCFI in the global market outlook than use it as a substitute for the global freight rate index, the BDI. This is a case study of the synchronization of the economic fluctuations of the shipping industry. It suggests that the economic fluctuations of China need to be considered in the unstable global market forecast. In particular, this case applies to the fluctuations in the shipping industry synchronism and provides important results in scientific terms.
Keywords
Baltic Dry-bulk Index(BDI); China Container Freight Index(CCFI); Synchronization; Granger Causality Test; Business Cycle;
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Times Cited By KSCI : 2  (Citation Analysis)
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