Civil Aviation Transportation Industry and Economic Growth : An Investigation from China

Purpose – Since the civil aviation transportation industry takes an increasingly important position in economic growth, this paper attempts to exploit the mutual effect between civil aviation transportation industry and economic growth. Research design, data, and methodology – The quarterly data from 2003-Q1 to 2017-Q4 will be used to conduct an empirical analysis under the vector error correction model. Specifically, the co-integration test and the vector error correction estimation will be employed to reveal the long-run and short-run relationship between civil aviation transportation industry and economic growth. The Granger causality test will be applied to examine the casual relationship between both of them. Results – The findings exhibit that the civil aviation transportation industry has a long-run relationship with economic growth. However, the civil aviation transportation industry is still in the developing period. Meanwhile, the economic growth has a promoted-effect on civil aviation transportation industry. Furthermore, this paper also manifests that China’s products tend to develop in high-tech intensive and China’s excess capital starts to move abroad. Conclusion – In summary, this paper serves as a reminder that China’s government should open its civil aviation transportation industry more so as to bring its superiority into full play to promote economic growth.