Does Air Cargo Matter in Chinese Regional Economic Development? An Empirical Granger Causality Test

Jun Zhou, Liang Leng, Quan Yuan and Xiaofa Shi ()
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Jun Zhou: Key Laboratory of Road and Traffic Engineering of the Ministry of Education, Tongji University, 4800 Cao’an Road, Shanghai 201804, China
Liang Leng: Antai College of Economics & Management, Shanghai Jiao Tong University, Shanghai 200240, China
Quan Yuan: Key Laboratory of Road and Traffic Engineering of the Ministry of Education, Tongji University, 4800 Cao’an Road, Shanghai 201804, China
Xiaofa Shi: Key Laboratory of Road and Traffic Engineering of the Ministry of Education, Tongji University, 4800 Cao’an Road, Shanghai 201804, China

Sustainability, 2022, vol. 14, issue 15, 1-22

Abstract: Using longitudinal data of 110 prefecture-level cities in China between 2006 and 2019, this paper conducts a Granger causality test between air cargo and regional economies through a multivariate VAR model, and attempts to explain the causal relationship in accordance with the endogenous and exogenous growth theory. Our results show that while the impacts of regional socioeconomic factors, including GDP and employment, on air cargo are larger in terms of magnitude than those of air cargo on the regional economy, the former effects are less robust when subsamples are included in the models. The benefits of air cargo growth for local economic growth are less dependent on the sizes, locations, and characteristics of cities. In accordance with the endogenous and exogenous growth theory, air cargo development policies need to be more favorable to regions with faster growth in secondary industry employment, as well as regions that are in urgent need of developing import and export trade.

Keywords: air cargo; regional economy; Granger causality; exogenous growth; endogenous growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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