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- E-ISSN2233-5382
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E-ISSN : 2233-5382
An Empirical Study on Mutual Influence between Economic Index and Distribution Industry in Korean
Abstract
Purpose - The objective of this paper is to discover if there exists a relationship between the economic index and distribution industry index in Korean. Because of the distribution industry boom in the recent years, a lot of interest in the relationship between the economic index and distribution industry index in Korean and the economy has been generated. This article examine on the mutual influence between economic index and distribution industry index in Korean. Research design, data, and methodology - For this purpose, we use the vector-auto regression model, impulse response function and variance decomposition of the economic index and distribution industry index, Granger causality test using weekly data on the economic index and distribution industry price index in korea. The sample period is covering from January 2, 2010 to August 31, 2019. The VAR model can also be linked to cointegration analysis. Cointegration Analysis makes possible to find a mechanism causing x and y to move around a long-run equilibrium (Engle and Granger, 1987). This equilibrium means that external shocks may separate the series temporarily at any particular time, but there will be an overall tendency towards some type of long-run equilibrium. If variables are found to have this tendency they are said to be cointegrated and a long-run relationship between these series is established. These econometric tools have been applied widely into economics and business areas to analyze intertemporal linkages between different time series. Results - This research showed following main results. First, from the basic statistic analysis of the economic index and distribution industry index in Korean, the economic index and the distribution industry index in korea have unit roots. Second, there is at least one cointegration between the economic index and distribution industry index in Korean. Finally, the correlation between of the economic index and the distribution industry index in korea is (+) 0.528876. Conclusions - We find that the distribution industry price index Granger cause the economic index in korea. As a consequence, the distribution industry index affect the economic index in Korean. The distribution industry index to the economic index is stronger than that from the economic index to the distribution industry index.
- keywords
- Economic Index, Distribution, Distribution Industry, Impulse Response Function, Unit Root
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