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Airports, Market Access and Local Economic Performance: Evidence from China

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  • Stephen Gibbons
  • Wenjie Wu

Abstract

In this paper we study the effect of airports on local economic performance that arises from better access to domestic markets, using China's recent rapid air network expansion. We estimate the effects of the implied changes in access to population on measures of economic performance using a panel of counties built from administrative records and micro data on industrial firms. To mitigate endogeneity concerns we focus on a subsample of 'incidentally' affected counties, whose location midway between existing and new airports implies they not were explicitly targeted for development nor directly affected by airport operations. We also decompose market access into land-side and air-side components. Our key finding is that improved population access due to land-side distance reductions to airports increased industrial output and GDP, with an elasticity of around 0.25. An instrumental variables strategy exploiting conversion of historical military airports to civil use yields higher elasticities.

Suggested Citation

  • Stephen Gibbons & Wenjie Wu, 2017. "Airports, Market Access and Local Economic Performance: Evidence from China," SERC Discussion Papers 0211, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:sercdp:0211
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    3. Xingjian Liu, 2020. "Assessing airport ground access by public transport in Chinese cities," Urban Studies, Urban Studies Journal Limited, vol. 57(2), pages 267-285, February.
    4. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
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    8. Laila AitBihiOuali & Jose M. Carbo & Daniel J. Graham, 2020. "Do changes in air transportation affect productivity? A cross‐country panel approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 493-505, June.
    9. Liaoliao Duan & Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2021. "Transportation infrastructure and capital mobility: evidence from China’s high-speed railways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 617-648, December.
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    More about this item

    Keywords

    airports; infrastructure; productivity; China;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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