Spatial and Airport Heterogeneity in Linking Airports to Regional Economic Growth: A European Analysis

This chapter aims to address inconclusive evidence on the causal relationship between air connectivity and regional economic development by incorporating spatial heterogeneity in the roles that different types of airports may play within European regional economies. The findings suggest that, in general, the levels of connectivity provided by airports tend to follow gross domestic product (GDP) development rather than drive it. Large airports more often exhibit a self-reinforcing process characterized by bidirectional causality, whereas smaller airports primarily derive their connectivity from existing economic growth, with exceptions in remote regions that have potential for agglomeration economies, where even small airports can foster development. This spatial heterogeneity raises critical questions about the justification for supporting airports, as the economic impact varies significantly across different contexts. Ultimately, this chapter emphasizes the necessity of understanding the unique characteristics of regions and airports to inform effective place-based policies that balance the economic benefits of aviation with its associated negative externalities.