Abstract
Since 2013, the Civil Aviation Administration of China (CAAC) has subsidized small and medium-sized airports. The key objective of this study is to empirically validate the benefits and impacts of airport subsidies in facilitating domestic tourism development. This study contributes to the aviation and tourism literature and offers important insights to policymakers regarding airport subsidies and tourism promotion. The empirical results show that increases in airport subsidies increased airport passenger throughput and indirectly brought more tourists to the cities where airports are located. In addition, the airport subsidy scheme has had a stronger effect in boosting domestic tourist arrivals in inland regions compared with coastal regions. This study empirically finds that the government's airport subsidy scheme for small and medium-sized airports has been effective in supporting aviation and tourism development in ethnic minority areas, poor or remote regions with inconvenient land transportation.
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