IDEAS home Printed from https://ideas.repec.org/a/ijr/journl/v3y2015i6p271-277.html
   My bibliography  Save this article

Co-integration Analysis of Aviation Demand and Economic Growth in Philippines

Author

Listed:
  • Bilal Mehmood

    (GCUniversity, Lahore, Pakistan)

  • Amna Shahid

    (GCUniversity, Lahore, Pakistan)

  • Saddam Ilyas

    (GCUniversity, Lahore, Pakistan)

Abstract

Purpose: This paper is empirically analyses the aviation-led growth hypothesis for Philippines by testing causality between aviation and economic growth. We resort to econometric tests such as unit root tests and test of cointegration purposed by Johansen (1988). Methodology: Fully Modified OLS, Dynamic OLS and Conical Cointegration Regression are used to estimate the cointegration equation for time span of 1970 to 2012. Findings: Empirical results reveal the existence of cointegration between aviation demand and economic growth. Graphic methods such as Cholesky impulse response function (both accumulated and non-accumulated) and variance decomposition have also been applied to render the analysis rigorous. The positive contribution of aviation demand to economic growth is similar in all three estimation techniques of cointegration equation. Finally Granger causality test is also applied to find the direction of causal relationship. Recommendations: Findings help in chalking out the importance of aviation industry in economic growth for Philippines.

Suggested Citation

  • Bilal Mehmood & Amna Shahid & Saddam Ilyas, 2015. "Co-integration Analysis of Aviation Demand and Economic Growth in Philippines," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(6), pages 271-277, June.
    • Handle: RePEc:ijr:journl:v:3:y:2015:i:6:p:271-277
    as

    Download full text from publisher

    File URL: http://tesdo.org/shared/upload/pdf/papers/IJEER,%203_6_,%20271-277%20.pdf
    Download Restriction: no
    File URL: http://tesdo.org/journal_detail.php?paper_id=167&expand_year=2015
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ghosh, Sajal, 2006. "Steel consumption and economic growth: Evidence from India," Resources Policy, Elsevier, vol. 31(1), pages 7-11, March.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Yuan, Jiahai & Zhao, Changhong & Yu, Shunkun & Hu, Zhaoguang, 2007. "Electricity consumption and economic growth in China: Cointegration and co-feature analysis," Energy Economics, Elsevier, vol. 29(6), pages 1179-1191, November.
    4. Bilal Mehmood & Acleo Feliceo & Amna Shahid, 2014. "What Causes What? Aviation Demand And Economic Growth In Romania: Cointegration Estimation And Causality Analysis," Romanian Economic Business Review, Romanian-American University, vol. 9(1), pages 21-33, March.
    5. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    6. Bilal Mehmood & Zahid Irshad Younas & Amna Shahid, 2014. "Aviation Demand as Covariate of Economic Growth in Bangladesh: Cointegration Estimation and Causality Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(8), pages 301-307, August.
    7. Amaira Bouzid, 2012. "The Relationship of Oil Prices and Economic Growthin Tunisia: A Vector Error Correction Model Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(43), pages 3-22, March.
    8. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    9. Marazzo, Marcial & Scherre, Rafael & Fernandes, Elton, 2010. "Air transport demand and economic growth in Brazil: A time series analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(2), pages 261-269, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pacheco, Ricardo Rodrigues & Fernandes, Elton, 2017. "International air passenger traffic, trade openness and exchange rate in Brazil: A Granger causality test," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 22-29.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bilal Mehmood & Acleo Feliceo & Amna Shahid, 2014. "What Causes What? Aviation Demand And Economic Growth In Romania: Cointegration Estimation And Causality Analysis," Romanian Economic Business Review, Romanian-American University, vol. 9(1), pages 21-33, March.
    2. Bilal Mehmood & Zahid Irshad Younas & Amna Shahid, 2014. "Aviation Demand as Covariate of Economic Growth in Bangladesh: Cointegration Estimation and Causality Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(8), pages 301-307, August.
    3. Wang, Sen & Gao, Yi, 2021. "A literature review and citation analyses of air travel demand studies published between 2010 and 2020," Journal of Air Transport Management, Elsevier, vol. 97(C).
    4. Bilal MEHMOOD & Muhammad ALEEM & Nabeel SHAHZAD, 2015. "AIR-TRANSPORT AND MACROECONOMIC PERFORMANCE IN ASIAN COUNTRIES: An Analysis," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(2), pages 179-192.
    5. Scheiblecker, Marcus, 2013. "Between cointegration and multicointegration: Modelling time series dynamics by cumulative error correction models," Economic Modelling, Elsevier, vol. 31(C), pages 511-517.
    6. Adrian C. Darnell, 1994. "A Dictionary Of Econometrics," Books, Edward Elgar Publishing, number 118.
    7. Muhammad Shahbaz & Ijaz Rehman & Nurul Mahdzan, 2014. "Linkages between income inequality, international remittances and economic growth in Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1511-1535, May.
    8. Chor Foon Tang and Eu Chye Tan, 2012. "Electricity Consumption and Economic Growth in Portugal: Evidence from a Multivariate Framework Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    9. Charles G. Renfro, 2009. "The Practice of Econometric Theory," Advanced Studies in Theoretical and Applied Econometrics, Springer, number 978-3-540-75571-5, July-Dece.
    10. Oryani, Bahareh & Koo, Yoonmo & Rezania, Shahabaldin & Shafiee, Afsaneh & Khan, Muhammad Kamran & Mahdavian, Seyed Mohammadreza, 2021. "The role of electricity mix and transportation sector in designing a green-growth strategy in Iran," Energy, Elsevier, vol. 233(C).
    11. Abbas, Faisal & Choudhury, Nirmalya, 2013. "Electricity consumption-economic growth Nexus: An aggregated and disaggregated causality analysis in India and Pakistan," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 538-553.
    12. Gerardo Esquivel & Raúl Razo, 2003. "Fuentes de la inflación en México, 1989-2000: Un análisis multicausal de corrección de errores," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 18(2), pages 181-226.
    13. Gerdesmeier, Dieter, 1996. "Die Rolle des Vermögens in der Geldnachfrage," Discussion Paper Series 1: Economic Studies 1996,05, Deutsche Bundesbank.
    14. Tang, Tuck Cheong, 2003. "Japanese aggregate import demand function: reassessment from the 'bounds' testing approach," Japan and the World Economy, Elsevier, vol. 15(4), pages 419-436, December.
    15. Payne, James E., 2010. "A survey of the electricity consumption-growth literature," Applied Energy, Elsevier, vol. 87(3), pages 723-731, March.
    16. Gerdesmeier, Dieter, 1996. "The role of wealth in money demand," Discussion Paper Series 1: Economic Studies 1996,05e, Deutsche Bundesbank.
    17. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    18. Yap, Wei Yim & Lam, Jasmine S.L., 2006. "Competition dynamics between container ports in East Asia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 35-51, January.
    19. R. Santos Alimi, 2014. "ARDL Bounds Testing Approach to Cointegration: A Re-Examination of Augmented Fisher Hypothesis in an Open Economy," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 2(2), pages 103-114, June.
    20. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.

    More about this item

    Keywords

    Aviation; Economic Growth; the Philippines;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ijr:journl:v:3:y:2015:i:6:p:271-277. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Muhammad Shahbaz (PhD Applied Economics) (email available below). General contact details of provider: https://edirc.repec.org/data/tesdopk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.