Header

UZH-Logo

Maintenance Infos

Long-range growth: economic development in the global network of air links


Campante, Filipe; Yanagizawa-Drott, David (2016). Long-range growth: economic development in the global network of air links. UBS Center Working Paper Series 16, University of Zurich.

Abstract

We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles. We show that these air links have a positive effect on local economic activity, as captured by satellite-measured night lights. To shed light on how air links shape economic outcomes, we first present evidence of positive externalities in the global network of air links: connections induce further connections. We then find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses, but also gives rise to increased spatial inequality locally, and potentially globally.

Abstract

We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles. We show that these air links have a positive effect on local economic activity, as captured by satellite-measured night lights. To shed light on how air links shape economic outcomes, we first present evidence of positive externalities in the global network of air links: connections induce further connections. We then find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses, but also gives rise to increased spatial inequality locally, and potentially globally.

Statistics

Downloads

19 downloads since deposited on 29 Nov 2016
19 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
03 Faculty of Economics > UBS International Center of Economics in Society
Working Paper Series > UBS Center Working Paper Series
Dewey Decimal Classification:330 Economics
JEL Classification:F15, F21, F23, F63, O11, O18, O19, O47, R11, R12, R40
Uncontrolled Keywords:Globalization, air travel, connections, economic activity, local development, cities, business links, FDI, convergence, spatial inequality
Language:English
Date:November 2016
Deposited On:29 Nov 2016 15:49
Last Modified:08 Dec 2017 21:06
Series Name:UBS Center Working Paper Series
Number of Pages:35
ISSN:2296-2778
Official URL:http://www.ubscenter.uzh.ch/assets/workingpapers/WP16_long_range_growth.pdf
Related URLs:http://www.ubscenter.uzh.ch/index.php/de/publications/workingpapers

Download

Download PDF  'Long-range growth: economic development in the global network of air links'.
Preview
Content: Published Version
Filetype: PDF
Size: 4MB