American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
All Roads Lead to Rome: Global Air Connectivity and Bilateral Trade
American Economic Journal: Applied Economics
(pp. 1–36)
Abstract
Using itinerary-level global air traffic data, this paper proposes a novel instrumental variable to estimate the effect of in-person interactions on bilateral trade. By exploiting exogenous variations in air connectivity that are driven by third-country connecting capacities, we show that increased air connections boost trade, especially for complex industries and new products. Online interactions appear to be a limited substitute for in-person contact. These findings confirm the role of in-person communications in reducing information-sharing barriers. Our estimation approach also provides a useful tool for evaluating the social and economic impacts of a complex transport network.Citation
Wang, Zheng, Feicheng Wang, and Zhuo Zhou. 2026. "All Roads Lead to Rome: Global Air Connectivity and Bilateral Trade." American Economic Journal: Applied Economics 18 (4): 1–36. DOI: 10.1257/app.20240370Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- F14 Empirical Studies of Trade
- L93 Air Transportation
- R41 Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise