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Academic Journal of Engineering and Technology Science, 2020, 3(5); doi: 10.25236/AJETS.2020.030518.

Analysis of correlation and influence degree between BDI index and fluctuation of transport capacity index

Author(s)

Jinming Ren

Corresponding Author:
Jinming Ren
Affiliation(s)

College of Transport & Communications, Shanghai Maritime University, Shanghai 201306, China
1148522113@qq.com

Abstract

The Baltic Dry Index (BDI) is a barometer of the international dry bulk shipping market, the changes of BDI volatility related to many factors, which are greatly influenced by supply and demand side. In order to explore the correlation of BDI and the capacity index, the monthly data of Baltic dry index (BDI) and fleet capacity index from January 2014 to May 2020 were chosen as samples to establish VAR model, using Granger causality test, impulse response and variance decomposition methods to explore the causation and influence degree of them. It is concluded that used ship trading trading is the main reason that affects the fluctuation of BDI index, and the fluctuation of BDI index in turn will affect the capacity of demolitions and new shipbuilding orders, which provides a basis for shipping enterprises to adjust the capacity and effectively avoid operational risks.

Keywords

BDI index, capacity supply, VAR model, Granger causality test, variance decomposition

Cite This Paper

Jinming Ren. Analysis of correlation and influence degree between BDI index and fluctuation of transport capacity index. Academic Journal of Engineering and Technology Science (2020) Vol. 3 Issue 5: 142-151. https://doi.org/10.25236/AJETS.2020.030518.

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