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The effect of airports on the growth of service exports

Richard Kneller () and Danny McGowan

No 2019-10, Discussion Papers from University of Nottingham, GEP

Abstract: This paper studies the causal effect of airports on the growth of service exports. We exploit the location of historic military-built airfields as instruments for the current stock of international airports across UK regions. The estimates show that an additional airport increases the growth rate of exports by 76% over an 8-year time period. Airports affect exports by increasing both the intensive and extensive margins. The evidence is consistent with airports improving market access and reducing fixed and variable trade costs. These results are robust to the addition of contemporaneous and historic controls and various falsification and robustness tests.

Keywords: airports; exports; service sector (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gro, nep-int and nep-tre
Date: 2019
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