This study applies the Johansen cointegration test and vector error correction model (VECM) to investigate the long-run equilibrium and short-run causality between China Export Containerized Freight Index (CCFI) and China Newbuilding Containership Price index (CNCPI). The empirical results show that there is a long-run cointegration relationship between them. In the long run, an increase in CCFI will drive growth in CNCPI, and similarly, an increase in CNCPI will also drive growth in CCFI. However, in the short term, they have no causal relationship. Our study provides a new perspective for policy making in China’s shipbuilding industry.

Ⅰ. Introduction
Ⅱ. Methodology and Modeling Framework
Ⅲ. Empirical results
    1. Unit Root Analysis
    2. Cointegration Test
    3. The long-run relationship
    4. Short-run dynamics
    5. VECM Model Test
Ⅳ. Conclusion
References
ABSTRACT

• Ding Xingong(Doctoral Student, Department of International Trade, Jeonbuk National University, Korea.)
• Thi Thuy Lam Bui(Undergraduate, Department of International Trade, Jeonbuk National University, Korea) Corresponding Author