Abstract
This study analyses the factors influencing passenger transportation demand at the Thai-Laos Friendship Bridge in Nong Khai Province, Thailand. Secondary data was collected from July 2007 to June 2010. The passenger transportation demand model estimation via a unit root test prior to the ordinary least square (OLS) technique found that the passenger number has a long-term, positive equilibrium relationship with the price. On the other hand, gross domestic product (GDP) and the frequency of services provided, have a negative relationship with the exchange rate. The empirical results of a short term analysis based on the error correction mechanism (ECM) estimation revealed that the adjustment speed that affects the number of passengers deviates from the equilibrium point to the long-term equilibrium point by 46.3 percent in each time period. Proposed policy recommendations are as follows: entrepreneurs should increase the frequency and number of services; wider variety of vehicles should be provided; each vehicle should run at full capacity; overall improvement in speed, safety and efficiency of the services is also necessary.
Highlights
Thailand and the Laos PDR have a very long border of 1,810 kilometers which has been involved with international economic transactions in terms of trade, investment, tourism and passenger transportation over a long period
The passenger transportation demand model estimation via a unit root test prior to the ordinary least square (OLS) technique found that the passenger number has a long-term, positive equilibrium relationship with the price
The empirical results of a short term analysis based on the error correction mechanism (ECM) estimation revealed that the adjustment speed that affects the number of passengers deviates from the equilibrium point to the long-term equilibrium point by 46.3 percent in each time period
Summary
Thailand and the Laos PDR have a very long border of 1,810 kilometers which has been involved with international economic transactions in terms of trade, investment, tourism and passenger transportation over a long period. There are 36 custom check points allowing passenger transportation between the two countries by international bus, train, car, or private hire van. The trend of passenger transportation has recently increased because of the rise of tourists and investors as well as the supporting promotion policy of both countries for the passenger transportation business. The growth of this business can be attributed to the capacity of Nong Khai province with respect to tourist attractions and destinations, food, culture and the natural environment. The results of this study can be used as guidelines for both entrepreneurs and related government organizations
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