Causal nexus between air transportation and economic growth in BRICS countries

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Causal nexus between air transportation and economic growth in BRICS countries

Ali, Rafaqet / Bakhsh, Khuda / Yasin, Muhammad Asim

Abstract Air transportation is important factor which helps to vibrate economic activities in any economy. This paper explore causal nexus between air transportation and economic growth in BRICS countries by using balanced panel date for the period 1993–2019. Numbers of air passengers and air freight are used as measures of air transportation. Panel time series econometric techniques coupled with panel Vector Error Correction Model and Dumitrescu and Hurlin tests are applied for causal analysis. Unidirectional long run causalities are found from air passengers and airfreight to economic growth in these countries. Likewise, one way short run causal relation from air transportation to economic growth is found in these countries. Based on the findings of this, there is economic significance of air transportation in these countries, hence, important policy implications are discussed.

Highlights • Air transportation is an important factor which helps to vibrate economic activities in any economy. • This study explores causal nexus between air transportation and economic growth in BRICS countries. • Numbers of air passengers and air freight are used as measures of air transportation. • Unidirectional long and short run causality from air transportation to economic growth. • There is economic significance of air transportation in these countries.