Causal Relationship Between Air Transport and Economic Growth: Evidence from Panel Data for High, Upper-Middle, Lower-Middle and Low-Income Countries

Abstract

This study aims to find out the causal relationship between air transport and economic growth based on income level. To this end, selected countries with high-income, uppermiddle-income, lower-middle-income, and low-income levels were included in the analyses for this study. Focusing on the 1990-2016 period, a total of 70 countries were classified according to their income levels and were analyzed empirically. In the study, panel causality analyzes by Kónya (2006) and Emirmahmutoğlu & Köse (2011) were used. Our findings show that GDP has a certain degree of effect on air transport. They also indicate that the unidirectional or bidirectional causal relationships running from GDP to air transport and air transport to GDP vary by the income level of countries.