Aviation and Businesses

Shon Ferguson Rikard Forslid

Domestic direct flight routes to Stockholm is important for the manufacturing industry in the municipalities outside the three metropolitan regions and international direct routes are particularly important for the service industry. These are two of the findings in a research report from SNS authored by economists Shon Ferguson and Richard Forslid.

flyget_och_foretagen.pdf 1.6 MB PDF

Aviation and businesses is the first comprehensive research study on how access to air routes affects local Swedish business. The researchers have been studying which sectors are dependent on the availability and the type of air transportation that are important to various industries.
The researchers identify multiple correlation between air routes and the local business structure.

• The relationship between distance to the nearest airport and economic activity in a community is strong. A municipality with 10 percent longer distance has about 13 percent lower production, 14 percent lower imports and over 10 percent lower exports.
• The sectors showing the strongest correlation between proximity to an airport and economic activity is IT, education and finance.
• Import of goods are more dependent on air transport than export of goods.
• Bromma airport appears to be important for importing companies in the Stockholm County.

The report shows that direct routes to Stockholm is important for the manufacturing industry, which is the dominant industry in the municipalities outside the three metropolitan counties in Sweden. Aviation is particularly important for trade in services and the human capital-intensive service sector.
In a concluding chapter, the Öresund bridge as a natural experiment to study the causal relationship between aviation and business. When the Öresund Bridge opened, companies in Skåne improved access to Kastrup airport international routes. The report show that these direct flight routes has resulted in more trade in the region. Trade in services is most affected by the availability of direct routes, especially exports of services by private Swedish-owned companies in the IT, finance and education sectors.

Examples of media headlines after the report was published: “New report shows the strong link between proximity to airports and growth”, “The industries that are most dependent on air travel”, “Aviation is important for companies”, “Aviation is an engine for growth.”