An Exploration in to the Causal Relationship between Performance Inputs and Traffic of Major Ports in India: A Panel Data Analysis

Abstract

The present research work started with a very simple question: Is there a long run relationship and causality between port performance inputs and port traffic of major ports in India? The study is try to evaluate the long run relationship and causality between port performance inputs and port traffic with the sophisticated panel data models such as unit root, cointegration, error correction model, granger causality, impulse response function and variance decomposition tests of 12 major ports in India over the period of 1993 to 2012. Based on the analysis it is found that there exists long run relationship and causality between port performance inputs and port traffic. The study concluded that the evidence of long run relationship between performance inputs and total traffic, and causality of pre-berthing waiting time and operating expenses unidirectional with port traffic indicate that the major factors influencing port traffic. Over all the results imply that port performance variables that are having the co-integrating relationship with port traffic should be given priority for increasing the port traffic of major ports in India.