Analyzing the Relationship between Air Transportation and Economic Value Added with Generalized Method of Moments (Case Study: Iran Provinces)

The transportation industry of any country represents the economic situation and the extent of its industrial development, so it can be considered as one of the important factors in the economic, cultural and social development, etc. of each region. Therefore, the growth of economic activities in Iran and the need for faster transportation of people and goods enables the country to serve as the main transport hub for export, import and transit. Reviewing the role of this type of Transportation is important in economic growth and can be effective in identifying opportunities and challenges, and ultimately providing a better view for policymakers and operators in this field. Accordingly, the purpose of this study is to investigate the role of air transportation (number of passengers and the volume of freight transported) on economic value added in the provinces of the country (31 provinces) between 2005 and 2017. The results of this study, using the dynamic panel econometric approach (Generalized Method of Moments or GMM), show the positive and significant effects of variables on the number of air transport passengers and education, as well as the negative and significant effects of unemployment and the volume of freight transported by air transportation on the economic value added of the provinces of Iran. According to the results, it can be argued that air transportation of passenger in the country's situation during the period of this study can be the factor for growing economic value-added, while, the freight transportation in terms of the costs has not economic efficiency. Furthermore, the results illustrate that establishing international airports in the province has a positive effect on economic value-added and also the value-added of the previous period has positive and significant effects on current economic value-added which represent dynamic of growth.