IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i16p7406-d1725640.html

When Does Air Transport Infrastructure and Trade Flows Matter? Threshold Effects on Economic Growth in ASEAN Countries

Author

Listed:
  • Warunya Chaitarin

    (School of Business and Communication Arts, University of Phayao, Phayao 56000, Thailand)

  • Paravee Maneejuk

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Songsak Sriboonchitta

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Woraphon Yamaka

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

Abstract

This study examines how air transport infrastructure and trade flows influence economic growth across ASEAN countries, with a focus on identifying the threshold levels at which these factors begin to enhance growth. Despite increasing investment in regional logistics and connectivity, policymakers often lack evidence-based thresholds to guide infrastructure and trade policy for long-term development. Addressing this gap, this study applies a Dynamic Panel Threshold Model to uncover the tipping points at which improvements in air cargo volume (lnCargo) and air transport infrastructure quality (lnQAir) translate into stronger economic growth. By employing System-GMM and First-Difference GMM estimations, the analysis captures the threshold effects of air cargo volume (lnCargo) and air transport infrastructure quality (lnQAir) on economic growth over varying regimes. The results reveal significant single-threshold effects for both lnCargo and lnQAir, indicating that their contributions to economic growth become substantial after surpassing specific critical levels. When air cargo volume exceeds approximately 267,067 tons per year (lnCargo > 5.5875), its positive effect on economic growth strengthens, particularly when accompanied by high-quality infrastructure. Similarly, air transport infrastructure quality exhibits a significantly stronger impact on economic growth once it exceeds the critical threshold of lnQAir = 1.5476 (≈4.7001 index points). These findings emphasize the complementarity between trade flows and infrastructure, aligning with endogenous growth theory, which suggests that infrastructure investments yield increasing returns when integrated with trade expansion. Policy implications suggest that ASEAN economies should adopt demand-driven infrastructure development aligned with trade dynamics, prioritizing regional connectivity, logistics efficiency, and investment attraction to sustain long-term economic growth.

Suggested Citation

  • Warunya Chaitarin & Paravee Maneejuk & Songsak Sriboonchitta & Woraphon Yamaka, 2025. "When Does Air Transport Infrastructure and Trade Flows Matter? Threshold Effects on Economic Growth in ASEAN Countries," Sustainability, MDPI, vol. 17(16), pages 1-19, August.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:16:p:7406-:d:1725640
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/16/7406/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/16/7406/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Kaya, Gizem & Aydın, Umut, 2024. "The nexus between air transport and economic growth geographically: An evidence based on heterogeneous panel data models," Journal of Air Transport Management, Elsevier, vol. 115(C).
    3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    4. Wu, Tsung-Pao & Zheng, Yi & Wu, Hung-Che & Deng, Ruixin, 2024. "The causal relationship between the COVID-19, Delta and Omicron pandemic and the air transport industry: Evidence from China," Journal of Air Transport Management, Elsevier, vol. 116(C).
    5. Myung Hwan Seo & Sueyoul Kim & Young-Joo Kim, 2019. "Estimation of dynamic panel threshold model using Stata," Stata Journal, StataCorp LLC, vol. 19(3), pages 685-697, September.
    6. Bensassi, Sami & Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2015. "Relationship between logistics infrastructure and trade: Evidence from Spanish regional exports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 72(C), pages 47-61.
    7. Brugnoli, Alberto & Dal Bianco, Antonio & Martini, Gianmaria & Scotti, Davide, 2018. "The impact of air transportation on trade flows: A natural experiment on causality applied to Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 95-107.
    8. Jun Zhou & Liang Leng & Xiaofa Shi, 2022. "The Impact of Air Cargo on Regional Economic Development: Evidence from Chinese Cities," Sustainability, MDPI, vol. 14(16), pages 1-16, August.
    9. Junjie Hong & Zhaofang Chu & Qiang Wang, 2011. "Transport infrastructure and regional economic growth: evidence from China," Transportation, Springer, vol. 38(5), pages 737-752, September.
    10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    11. Park, Soonchan, 2020. "Quality of transport infrastructure and logistics as source of comparative advantage," Transport Policy, Elsevier, vol. 99(C), pages 54-62.
    12. Svetlana Gutman & Marina Malashenko, 2025. "The Impact of Transport Infrastructure on Sustainable Economic Development of Russian Regions," Sustainability, MDPI, vol. 17(9), pages 1-23, April.
    13. Kenneth Button & Junyang Yuan, 2013. "Airfreight Transport and Economic Development: An Examination of Causality," Urban Studies, Urban Studies Journal Limited, vol. 50(2), pages 329-340, February.
    14. Bayissa Badada & G. Delina & Sun Baiqing & Ramaswamy Krishnaraj, 2023. "Economic Impact of Transport Infrastructure in Ethiopia: The Role of Foreign Direct Investment," SAGE Open, , vol. 13(1), pages 21582440231, March.
    15. Cohen, Jeffrey P. & Morrison Paul, Catherine J., 2003. "Airport infrastructure spillovers in a network system," Journal of Urban Economics, Elsevier, vol. 54(3), pages 459-473, November.
    16. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    17. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    18. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    19. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    20. Oum, Tae Hoon & Wu, Xiangru & Wang, Kun, 2024. "Impact of air connectivity on bilateral service export and import trade: The case of China," Transport Policy, Elsevier, vol. 148(C), pages 219-233.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Shaaba Saba & Nicholas Ngepah, 2022. "ICT Diffusion, Industrialisation and Economic Growth Nexus: an International Cross-country Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2030-2069, September.
    2. Anis Ochi & Makram Nouaili & Yosra Saidi & Amine Haouas & Anis Saidi, 2026. "Foreign Direct Investment and Economic Growth in Arab Countries: Do Institutions, Financial Development, and Knowledge Economy Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(2), pages 5145-5179, April.
    3. Charles Shaaba Saba & Nicholas Ngepah & Nicholas M. Odhiambo, 2024. "Information and Communication Technology (ICT), Growth and Development in Developing Regions: Evidence from a Comparative Analysis and a New Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14700-14748, September.
    4. Dimitrios Paparas & Christian Richter, 2015. "Fiscal policy and economic growth: Empirical evidence from the European Union," Working Papers 2015.06, International Network for Economic Research - INFER.
    5. Dimitrios PAPARAS & Christian RICHTER & Alexandros PAPARAS, 2015. "Fiscal Policy and Economic Growth, Empirical Evidence in European Union," Turkish Economic Review, KSP Journals, vol. 2(4), pages 239-268, December.
    6. Inayat Ullah Wani & Ishfaq Nazir Khanday, 2024. "Dynamic Interaction Between Financial Inclusion and Gender Equality in Determining Economic Growth: A Study of Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17821-17846, December.
    7. Swamy, Vighneswara & Dharani, Munusamy, 2019. "The dynamics of finance-growth nexus in advanced economies," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 122-146.
    8. Ejike Udeogu & Shampa Roy-Mukherjee & Uzochukwu Amakom, 2021. "Does Increasing Product Complexity and Diversity Cause Economic Growth in the Long-Run? A GMM Panel VAR Evidence," SAGE Open, , vol. 11(3), pages 21582440211, August.
    9. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    10. Charles S. Saba, 2023. "Investigation of Telecommunication Infrastructures-Industrialisation-Growth Nexus: Evidence from Disaggregated Panel Data Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 76(2), pages 209-264.
    11. Andreas Dietrich, 2012. "Does growth cause structural change, or is it the other way around? A dynamic panel data analysis for seven OECD countries," Empirical Economics, Springer, vol. 43(3), pages 915-944, December.
    12. Vighneswara Swamy & Dharani M, 2020. "The tipping point of financial development? – evidence from OECD countries," International Economics and Economic Policy, Springer, vol. 17(1), pages 125-165, February.
    13. Mariusz Próchniak & Bartosz Witkowski, 2006. "Modelowanie realnej konwergencji w skali międzynarodowej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 1-31.
    14. Laurent Cavenaile & Christian Gengenbach & Franz Palm, 2014. "Stock Markets, Banks and Long Run Economic Growth: A Panel Cointegration-Based Analysis," De Economist, Springer, vol. 162(1), pages 19-40, March.
    15. Moaniba, Igam M. & Su, Hsin-Ning & Lee, Pei-Chun, 2019. "On the drivers of innovation: Does the co-evolution of technological diversification and international collaboration matter?," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    16. Ahmed, Walid M.A., 2020. "Corruption and equity market performance: International comparative evidence," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    17. Rahman, Mizanur, 2008. "The Impact of a Common Currency on East Asian Production Networks and China’s Exports Behavior," MPRA Paper 13931, University Library of Munich, Germany.
    18. Benos, Nikos & Karagiannis, Stelios, 2013. "Do Cross-Section Dependence and Parameter Heterogeneity Matter? Evidence on Human Capital and Productivity in Greece," MPRA Paper 53326, University Library of Munich, Germany.
    19. Westerlund, Joakim & Norkute, Milda, 2014. "A Factor Analytical Method to Interactive Effects Dynamic Panel Models with or without Unit Root," Working Papers 2014:12, Lund University, Department of Economics.
    20. Hulya Ulku, 2007. "R&D, innovation and output: evidence from OECD and nonOECD countries," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 291-307.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:16:p:7406-:d:1725640. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.