Research on Dynamic Mechanism of Global Cotton Business Ecosystem Based on Var Model

The basic activities of global cotton business ecosystem are activities of producing, consuming, storing, importing, exporting and pricing. By using vector autoregressive model, ADF (Augmented Dickey-Fuller) stationary test and Granger causality test, we analyze the causal relationship between the true price, cotton inventory, cotton producing and its import and export in global cotton business ecosystem. With impulse response function analysis, we conclude that there are three action mechanisms in this business ecosystem, "production-price" determining mechanism, "inventory" buffer mechanism and "importexport" safeguard mechanism.