Ready for take-off? The economic effects of regional airport expansions in Germany

Abstract

Airports are an important factor of regional connectivity. Following the literature, a sufficiently dense airport network is an important determinant for growth. However, regional airports in Germany exhibit financial losses and depend on subsidies. This paper analyses the potential spillover effects of airports on the surrounding economies that may justify those subsidies by exploiting the deregulation of the European aviation market as a quasi-natural experiment. Subsequent airport expansions are evaluated in a difference-in-differences framework, making use of the exogenous shift in airport demand for regional airports due to the deregulation. Results show no evidence for spillover effects of Germany's regional airports.

How new airport infrastructure promotes tourism: evidence from a synthetic control approach in German regions

“…A total of 21% of the respondents believe that Memmingen Airport improved business connections, and about one-third reported that the new airport infrastructure helped to improve conditions regarding location and attracting specialist workers from abroad. Breidenbach (2019), however, finds no evidence for spillover effects of regional airports on the surrounding economies in Germany.…”

Málaga Costa del Sol airport and its new conceptualization of hinterland

“…Florido-Benítez and del Alc azar (2020) and Florido-Benítez (2021c) claimed that ¾ of tourists arrived in Spain through airports in 2019. The literature relation to airport's hinterland, and spatial spillover effects is not very extensive, and this paper is focused on these authors (Hakfoort et al, 2001;Percoco, 2010;Alves, 2014;Jian et al, 2017;Sheard, 2019;Kassarda, 2020;Breidenbach, 2020;Florido-Benítez, 2021c, 2021dBenedetti et al, 2012;Doganis, 2019;Perboli et al, 2015;Yuen et al, 2017;Chen et al, 2021, amongst many others). The systematic review process can be defined as a thorough review of the existing evidence on a clearly formulated question that applies explicit and systematic procedures to identify, choose and critically appraise relevant research, along with the extraction and analysis of data from the studies that are incorporated in the review (De Menezes and Kelliher, 2011;Christofi et al, 2017).…”

“…Access to international markets affects cities and its hinterland in about the same way, although point estimates suggest that cities are usually less affected by access to international markets than are their hinterlands (Baum-Snow et al, 2020). Proponents of regional airports emphasize the importance of positive spillovers on employment and economic growth throughout the region (Breidenbach, 2020).…”

Regional Airports and Economic Growth: Evidence from the Single European Aviation Market

“…The aviation deregulation was split into three separate air transport liberalization packages. The first and the second package were implemented in 1988 and 1990, entailing, among others, the allowance of multiple designations, fifth-freedom rights, and three-bounded fare zones (Breidenbach, 2020) [Multiple designations refers to the concept of one country designating more than one of its airlines to fly a particular international route. For example, nowadays multiple U.S. airlines operate flights on the same routes across the Atlantic.…”