Does airport construction narrow regional economic disparities in China?

Abstract

This paper explores the impact of airport construction on regional economic disparities in China using the difference-in-differences method with a long-term dataset at the city level from 1994 to 2018. We found that airport construction is associated with regional economic disparities. The mechanism operates through the enhancement of investment by airport construction, which improves local capital stock and fixed asset investment, while the channel of human capital inflow and TFP does not work. The temporal heterogeneity test proved that the effect worked only after the territorial reform of airports in 2002. The spatial heterogeneity test showed that airport construction in eastern, central, and northern cities reduced disparities in nearby cities compared to the national average, while airport construction in western cities only reduced disparities within the region. Type heterogeneity revealed that branch-line airports reduced the regional gap, while hub airports and trunk airports did not. This paper provides theoretical and practical guidance for exploring the function of airports in China's regional integration.