[Research Seminar] IFLAME: “Fly to trade: Effects of international direct flights on chinese cities’ trade” S. FU – Xiamen University

Speaker: Shihe FU
Xiamen University

Date and Location – Thursday January 13th 2022 from 12:00 to 13:30 on Zoom

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ABSTRACT

This paper estimates the causal effect of international direct flights on cities’ international trade, using Chinese customs transaction-level trade data and flight route data from 2000 to 2015 and a staggered differences-in-differences approach. On average a Chinese city’s exports to a destination country (imports from a source country) increase by 12.8% (10.4%) after a direct flight route is launched between the city and the country. This positive effect is stronger for the industries with high face-to-face communication intensity and high contract intensity, suggesting that international direct flights reduce cost of international trips and promote face-to-face interactions among international business people.