Fly and trade: Evidence from the Italian manufacturing industry

This paper offers an empirical investigation of the relationship between air transport service and trade, using a panel of 20 Italian regions and 24 European countries observed, half-yearly, over the period 1998-2010. We apply a Newey-West two-step GMM estimator to produce estimates which are robust to the presence of heteroskedasticity and autocorrelation. Our findings suggest that air transport service positively affects the export of Italian manufacturers and that full-service carriers are mainly responsible for this result.