The Impact of Russia-Ukraine Conflict on Chinese Transportation Industry Index: Evidence from ARIMA Model

Abstract

This paper examines the short-term (5 months) impact of Russian Invasion of Ukraine, occurred in February 24, 2022, to Chinese transportation industry. Setting the closing prices of Chinese Transportation Securities as the index of evaluating Chinese transportation industry and utilizing the ARIMA model, this paper makes use of the historical data of closing prices of Chinese Transportation Securities before February 24, 2022 to forecast the securities prices without the occurrence of the war. Comparing the actual and fitted values of the prices of securities, this paper concludes that the Russia-Ukraine war was a shock to Chinese transportation industry in a relatively short period. From the results of the model, the transportation industry in China had about one week lag correspondence to the occurrence of the war. Although there was a plummet in the prices of Transportation Securities from the first to the fifth weeks after the war, the market recovers soon from the bad news in two to three months. Suggestions from this essay includes encouraging green energy resources exports and improving international relationships with other countries from the government’s side and reducing sensitivity to sudden market changes from the investors’ side.