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Airline stock market performance and political relations: A cross-quantilogram analysis of Chinese and US carriers

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  • Cai, Yifei
  • Zhang, Yahua
  • Wu, Yanrui
  • Chang, Tsangyao

Abstract

This study focuses on examining the quantile dependence and directional predictability between airline stock returns and various political variables, including the US-China political relations, geopolitical risks, and partisan conflicts. To achieve these goals, a novel cross-quantilogram method is employed. The findings reveal that directional predictability is more pronounced when airline stock returns and the political environment experience extreme conditions. In addition, the US partisan conflicts index exhibits a more substantial influence on the dependence structure than the indexes of Sino-US political relations and geopolitical risks. Moreover, similarities are observed in the behavior of US airline stock returns given partisan conflicts and geopolitical risks. Finally, policy implications are provided.

Suggested Citation

  • Cai, Yifei & Zhang, Yahua & Wu, Yanrui & Chang, Tsangyao, 2024. "Airline stock market performance and political relations: A cross-quantilogram analysis of Chinese and US carriers," Transport Policy, Elsevier, vol. 155(C), pages 124-149.
    • Handle: RePEc:eee:trapol:v:155:y:2024:i:c:p:124-149
    DOI: 10.1016/j.tranpol.2024.06.025
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