NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Long-Range Growth: Economic Development in the Global Network of Air Links

Filipe Campante, David Yanagizawa-Drott

NBER Working Paper No. 22653
Issued in September 2016
NBER Program(s):DEV, EFG, ITI, POL

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.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Supplementary materials for this paper:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22653

Users who downloaded this paper also downloaded* these:
Bhuller, Dahl, Løken, and Mogstad w22648 Incarceration, Recidivism and Employment
Berrospide, Correa, Goldberg, and Niepmann w22645 International Banking and Cross-border Effects of Regulation: Lessons from the United States
Redding and Rossi-Hansberg w22655 Quantitative Spatial Economics
Levere, Acharya, and Bharadwaj w22640 The Role of Information and Cash Transfers on Early Childhood Development: Evidence from Nepal
Shertzer, Twinam, and Walsh w22658 Zoning and the Economic Geography of Cities
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us