Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries
Container shipping drives the development of international trade, yet previous studies have not fully appreciated the possible bidirectional causal relationship between container freight rates and international trade. In the context of the “twenty-first Century Maritime Silk Road,” we use data on ex...
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| Format: | Article |
| Language: | English |
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Wiley
2022-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2022/2415914 |
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| author | Xingong Ding Mengzhen Wang |
| author_facet | Xingong Ding Mengzhen Wang |
| author_sort | Xingong Ding |
| collection | DOAJ |
| description | Container shipping drives the development of international trade, yet previous studies have not fully appreciated the possible bidirectional causal relationship between container freight rates and international trade. In the context of the “twenty-first Century Maritime Silk Road,” we use data on export container freight rates and import/export data from Shanghai to ASEAN-6 countries (Singapore, Vietnam, Thailand, Philippines, Malaysia, and Indonesia) from February 2017 to January 2020 and apply a panel VAR to explore the relationship between maritime transport costs and international trade in the container shipping market. We use the freight rate data are from the Southeast Asia Freight Index, which is used for the first time in an empirical study. The quality and reliability of the freight rate data allow this paper to better identify causal relationships. The results of the panel Granger causality test and the orthogonal impulse response function suggest a bidirectional causal relationship between freight rates and export trade; to further explain, an increase in export trade lowers export freight rates, but an increase in export freight rates hinders export trade, and a growth in import trade unidirectionally raises export freight rates. We believe that international trade may impact freight rates through economies of scale and trade imbalances. |
| format | Article |
| id | doaj-art-7a74d181cefc4c22bcd3710c30280f22 |
| institution | Kabale University |
| issn | 1607-887X |
| language | English |
| publishDate | 2022-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-7a74d181cefc4c22bcd3710c30280f222025-02-03T01:00:41ZengWileyDiscrete Dynamics in Nature and Society1607-887X2022-01-01202210.1155/2022/2415914Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 CountriesXingong Ding0Mengzhen Wang1Department of International TradeDepartment of International TradeContainer shipping drives the development of international trade, yet previous studies have not fully appreciated the possible bidirectional causal relationship between container freight rates and international trade. In the context of the “twenty-first Century Maritime Silk Road,” we use data on export container freight rates and import/export data from Shanghai to ASEAN-6 countries (Singapore, Vietnam, Thailand, Philippines, Malaysia, and Indonesia) from February 2017 to January 2020 and apply a panel VAR to explore the relationship between maritime transport costs and international trade in the container shipping market. We use the freight rate data are from the Southeast Asia Freight Index, which is used for the first time in an empirical study. The quality and reliability of the freight rate data allow this paper to better identify causal relationships. The results of the panel Granger causality test and the orthogonal impulse response function suggest a bidirectional causal relationship between freight rates and export trade; to further explain, an increase in export trade lowers export freight rates, but an increase in export freight rates hinders export trade, and a growth in import trade unidirectionally raises export freight rates. We believe that international trade may impact freight rates through economies of scale and trade imbalances.http://dx.doi.org/10.1155/2022/2415914 |
| spellingShingle | Xingong Ding Mengzhen Wang Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries Discrete Dynamics in Nature and Society |
| title | Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries |
| title_full | Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries |
| title_fullStr | Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries |
| title_full_unstemmed | Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries |
| title_short | Container Freight Rates and International Trade Causality Nexus: Evidence from Panel VAR Approach for Shanghai and ASEAN-6 Countries |
| title_sort | container freight rates and international trade causality nexus evidence from panel var approach for shanghai and asean 6 countries |
| url | http://dx.doi.org/10.1155/2022/2415914 |
| work_keys_str_mv | AT xingongding containerfreightratesandinternationaltradecausalitynexusevidencefrompanelvarapproachforshanghaiandasean6countries AT mengzhenwang containerfreightratesandinternationaltradecausalitynexusevidencefrompanelvarapproachforshanghaiandasean6countries |