Air Passenger Transport In The APEC: Regulatory Impacts and Prospects for Asia Pacific Integration
AbstractThis study aims at assessing the prospects for a more liberal air passenger transport regime in the Asia Pacific region under the auspices of the Asia Pacific Economic Cooperation (APEC). The decades-old bilateral air services regime has been under pressure to reform for several years. Notwithstanding the critical role that international air transport plays in the ongoing integration of Asia Pacific economies, the airline industry remains one of the region’s most heavily regulated. Estimates from the gravity equation employing the Air Liberalization Index (ALI) developed by the World Trade Organization (WTO) Secretariat find a positive and statistically significant relationship between relaxing bilateral air services restrictions and air passenger traffic. The results hold for a wide range of specifications controlling for fixed effects, different sample sizes, and for all variants of the ALI. The preferred specification, the Anderson and Van Wincoop (2003) equation, provides the most conservative estimates. Prior to taking account of general equilibrium effects, the results imply that if APEC economies eased air transport restrictions to double the ALI scores with their aviation partners, both within and outside the APEC region, traffic would increase by 4.5%.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 27 (2012)
Issue (Month): ()
Air transport; Asia Pacific; Trade Policy;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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