INTERNATIONAL AIR TRAVEL AND FDI FLOWS: EVIDENCE FROM BARCELONA

This paper provides a bridge between the literature examining the economic impact of air services and the literature analyzing the determinants of bilateral FDI flows. I estimate a gravity equation for the determinants of bilateral FDI flows between the Spanish region of Catalonia, home to the airport of Barcelona, and countries of all over the world for the period 2002–2015. I find evidence that the reduction in travel time due to the availability of nonstop flights scheduled with sufficient frequency increases the amount of FDI due to the enhanced transmission of information.