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Face-to-face communication and production networks: evidence from first trans-Siberian flights

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  • Kiyoyasu Tanaka

    (Institute of Developing Economies, JETRO)

Abstract

Face-to-face communication (FFC) helps to coordinate production networks between suppliers and manufacturers. However, the significance of FFC in production networks is not empirically clear. This paper uses the new opening of nonstop passenger flights between Tokyo and Europe over Siberian routes from 1986 as an exogenous decline in FFC costs for Japanese firms. Estimating the impact of nonstop trans-Siberian flights on Japan’s exports in intermediate inputs for 1980–1989, I find the significantly positive impact of nonstop flights on exports from Japan to European destinations; 7 more nonstop flights increased the exports by 26%. The results are robust to changes in flight networks such as indirect passenger and freight flights. I show evidence that new nonstop flights increased the exports mainly through a reduction in FFC costs, rather than other trade barriers. The results are also robust to other product characteristics and alternative empirical strategy based on the global trade. Thus, FFC plays a critical role in shaping production networks.

Suggested Citation

  • Kiyoyasu Tanaka, 2025. "Face-to-face communication and production networks: evidence from first trans-Siberian flights," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(4), pages 1279-1306, November.
    • Handle: RePEc:spr:weltar:v:161:y:2025:i:4:d:10.1007_s10290-025-00589-1
    DOI: 10.1007/s10290-025-00589-1
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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