Dynamic relationship between transportation energy consumption and transportation industry growth

Dynamic relationship and interaction characteristics between transportation energy consumption and transportation industry growth in China is investigated by VAR model. Analysis is developed at both energy consumption and energy consumption structure levels. Co-integration analysis, impulse response function and variance decomposition approach are applied for the estimation of VAR model. Time series variables over the periods from 1985 to 2009 are employed in empirical tests. Results indicate that there is no long-run co-integration relationship between transportation energy consumption and transportation industry growth. Impulse responses demonstrate different response effects of no lag or 1 lag. Response effect is obvious and fluctuated severely in short run and weakens in long run with different positive or negative effect. Furthermore, the contribution diversity among variables is reported by variance decomposition.