Impact of air connectivity on bilateral service export and import trade: The case of China

Tae Hoon Oum, Xiangru Wu and Kun Wang

Transport Policy, 2024, vol. 148, issue C, 219-233

Abstract: This paper examines the effect of bilateral air connectivity on bilateral service trade flows. Our service trade data includes ‘commercial’, ‘transport’, ‘travel’, and ‘government’ services. We developed a reduced-form gravity-type model using the Chinese data. An instrument variable (IV) approach is adopted to address the endogeneity issue between bilateral air connectivity and the service trade variables. Our key results are: (a) increasing the number of direct routes can significantly promote bilateral service export and import trades; (b) the average route-level traffic density has only marginal positive effects; (c) improving air connectivity would enlarge China's overall service trade deficit, because the transport and travel services imports are promoted more than their exports; (d) The ‘commercial’ service exports can be stimulated more than the imports, making China achieve larger commercial service trade surplus by improving bilateral air connectivity.

Keywords: Service trade; China; Bilateral air connectivity; Gravity trade model; Instrument variable (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0967070X24000234
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:148:y:2024:i:c:p:219-233

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tranpol.2024.01.015

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().