Abstract
With growing uncertainty about the evolution of the global landscape, it is of great practical significance to explore the nonlinear dynamic adjustment relationship among the world oil market, the global bulk shipping market, the stock market, and economic growth in China. This paper applied the TVP-SV-VAR model and selected quarterly data from 1998 to 2020 to explore the dynamics. The results indicated that the impact intensity of BDI on China’s economy had a “positive” to “negative” change in different lag periods. This was mainly due to the fact that the negative impact of higher freight prices on China’s economy outweighed the positive impact of higher trade volumes on China’s economy. The impact intensity of BDI on GDP had a distinct medium- to long-term effect. A positive BDI shock had a dampening effect on stock prices in the short and medium term, while a positive BDI shock could promote stock market prosperity in the long-term perspective. The impulse responses of SSE and GDP to BDI showed that the external shipping market shocks to China’s stock market and economic growth gradually became smaller over time. For impulse response at three different time points, the impact intensity of the BDI to GDP varied at different time points, with the largest shock during the financial crisis in 2008, followed by the shock during the oil price crash in 2014, and the smallest during the COVID-19 epidemic. This demonstrated that the external shipping market’s influence on Chinese economic growth and stock market has gradually weakened over time, illustrating the enhancement of Chinese risk-resilience capacity.
Highlights
With the further advance of economic globalization and the rapid development of international trade, the scope and degree of international trade markets increasingly have extended and strengthened
Complexity in the market downturn. e shipping market went into a slow recovery, yet its upward trend was dampened by the sudden onset of COVID-19. e main factors influencing the fluctuation of the Baltic Dry Index (BDI) include global GDP growth rate, global demand for iron ore and coal transportation, global demand for grain transportation, global supply of ship tonnage, average international bunker price, war, and natural disasters
From the trend of BDI over the years, the bulk freight rate is determined by the relationship between supply and demand, but the concentration of dry bulk transport industry is low, and the change of the supply side is relatively slow. erefore, the short-term fluctuation of the BDI is mainly dominated by the demand side, which is greatly influenced by the change of economic prosperity
Summary
With the further advance of economic globalization and the rapid development of international trade, the scope and degree of international trade markets increasingly have extended and strengthened. In recent years, against the backdrop of structural changes in internal supply and demand, sharp fluctuations in oil prices and frequent unexpected events, the BDI fluctuates frequently and its influence on China’s economy should not be underestimated. Us, this paper attempts to use the TVP-SV-VAR model to analyze the nonlinear dynamic adjustment relationship among the world oil market, global shipping market, Chinese stock market, and economic growth and fully explore the inner influence mechanism between the variables. By identifying the potential shock effects of the world oil market and global shipping market, can we clarify the direction and path of policy adjustment based on the driving factors, effectively preventing the impact of oil prices and ocean freight rates, while reducing the possibility of unexpected shocks to Chinese economy and stock market. This paper examines the linkages and shock effects between markets under the major emergencies of the “financial crisis,” “international oil price crash,” and “COVID19,” in order to provide useful scientific reference for industry insiders
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