The impact of intercontinental air accessibility on local economies: Evidence from the de-hubbing of malpensa airport

An increasing body of literature has found a positive and significant impact of airport activities on local economies. However, it is not clear whether this effect is driven by demand factors (passengers arriving and departing with their expenditure) or supply factors (accessibility provision for local firms). By considering the 2008 de-hubbing of Malpensa Airport as a natural experiment, we estimate the impact of a reduction in flight network connectivity on employment in the travel to work areas of Lombardia, Piemonte, Liguria and Emilia Romagna. The de-hubbing decision, in fact, permanently affected the intercontinental accessibility of the airport, with only a temporary effect in terms of passengers. We found that areas characterized by export-oriented sectors suffered from contraction in the degree of connectivity, which decreased as an effect, along with distance from the airport. No effect was found in urban areas and areas characterized by heavy industry sectors.