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Airport Development and Regional Economic Growth in China

By Shujie Yao and Xiuyun Yang

Abstract

Air transport has experienced phenomenal growth in China over the last 30 years, but studies on China’s airport development are few. This paper aims to fill in this literature gap by focusing on the determinants of airport development in the Chinese regions using the most up-to-day and comprehensive data on China’s airports and their related economic and geographical variables. The empirical results based on an augmented production function indicate that airport development is positively related with economic growth, industrial structure, population density, and openness, but negatively related with ground transportation. The growth of airport transportation in the eastern region is slower than in the inland areas, implying a more significant substitution effect of air transport on ground transport in the less densely populated areas, irrespective of economic activities. The results have useful policy implications as any regional transportation development plan has to simultaneously consider the competitive and supplementary effects of both air and land transports in a specific location.Airport Development, Regional Economic Growth, China

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