Exploring the Impact of Air Transport on Economic Growth: New Evidence from Australia

Avishek Khanal (), Mohammad Mafizur Rahman, Rasheda Khanam and Eswaran Velayutham
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Avishek Khanal: School of Business, University of Southern Queensland, Toowoomba, QLD 4350, Australia
Mohammad Mafizur Rahman: School of Business, University of Southern Queensland, Toowoomba, QLD 4350, Australia
Rasheda Khanam: School of Business, University of Southern Queensland, Toowoomba, QLD 4350, Australia
Eswaran Velayutham: School of Business, University of Southern Queensland, Toowoomba, QLD 4350, Australia

Sustainability, 2022, vol. 14, issue 18, 1-17

Abstract: The COVID-19 pandemic has impacted all sectors of the tourism industry, particularly air transportation. However, air transport remains an important contributor to economic growth globally. Thus, this study examines whether air transport (a proxy for tourism) stimulates economic growth to validate the air-transportation-led growth hypothesis (ALGH) in the Australian context. To conduct the study, we analyse the asymmetric long-run and short-run impacts of the air passengers carried (a proxy for tourism) on the gross domestic product (GDP) in Australia. We use the nonlinear autoregressive distributed lag (NARDL) modelling approach on data for Australia from 1971 to 2019. We also examined the effects of selected control variables (i.e., energy consumption, financial development, socialisation, and urbanisation) on economic growth. In both the short and long run, we observed statistically significant asymmetric impacts of air transport on economic growth. The positive shocks in air transport propel the long-term growth of Australia’s economy. Additionally, according to the findings, negative shocks of air transport have a stronger detrimental impact on economic development than positive shocks.

Keywords: air transport; economic growth; ALGH; NARDL; Australia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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