Empirical study on the function of highway industry investment in Henan economic development

Co-integration theory was applied in this paper to verify the function of highway industry in Henan economic development. It shows that there is a long-term stable relationship between highway industry investment in Henan and Henan economic development. The construction of highway in Henan started rather late and its positive impacts on Henan economic development are inconspicuous, however, economic development is the Granger-cause to encourage highway industry investment. In addition, Henan economic development itself and the fluctuations of highway industry investment are responsible for Henan economic development´s short-term deviation off long-term stable relationship.