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An Assessment of the Causal Relationship between Air Passenger Traffic and Trade in Asia-Pacific

Elien Van De Vijver, Ben Derudder and Frank Witlox

A chapter in The Economics of International Airline Transport, 2014, vol. 4, pp 235-254 from Emerald Publishing Ltd

Abstract: Abstract During the last few decades, rising intra-regional volumes of trade as well as air passenger traffic have been key characteristics of Asia-Pacific’s economic development. Although conceptual and empirical linkages between rising levels of trade and air passenger flows are often assumed, relatively little is known about the potential causality in these parallels. In this chapter, we seek to empirically uncover this causality through the application of heterogeneous Time Series Cross Section Granger causality analysis for the period 1980–2010. Four scenarios are found amongst the different country-pairs: (1) there is no co-evolution, implying that both patterns develop independently (e.g. Japan–Australia); (2) there is ‘real’ co-evolution in that both patterns influence each other through feedback loops (e.g. South Korea–Philippines); (3) air passenger traffic is facilitated by trade (e.g., South Korea–Philippines); or (4) trade is facilitated by air passenger traffic (e.g. Australia–Malaysia). Some possible interpretations of this heterogeneity are discussed.

Keywords: Granger causality; Asia-Pacific; trade; air passenger travel; C330; F140; O530; O560; R490 (search for similar items in EconPapers)
Date: 2014
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