Direct Flights and Innovation: Evidence from Cross-Border Patents of Chinese Cities

Abstract

Our paper shows that direct air connectivity promotes and shapes cross-border innovation collaborations. We rely on geocoded data of international co-inventions involving China-based inventors and unique data on new direct air links connecting Chinese cities to the rest of the world between 1990 and 2016. Using an event study design, we find that the introduction of a direct link between a Chinese city and a foreign city increases the number of collaborations between them by half a standard deviation, starting 3 to 4 years after the establishment of the connection. The impact is stronger when there is little overlap in business hours and for technology classes where lab experiments are involved, and thus more frequent interactions may be required. These results confirm that cross-border communication costs constitute an important friction to collaboration between inventors. Joint paper with Sandra Poncet (PSE) and Ariell Reshef (PSE).