Quantifying the Relationship Between Air Transportation and Economic Growth in Kenya

Abstract

Air transportation remains a core factor in the world’s economic growth. Thus, in the context of Kenya, this study looked at the connection that between air transportation and the economy. To conduct the study, the research explored both the long-run and the short-run relationship between air transportation (both passenger and cargo) and the gross domestic product (GDP) in Kenya. Data for Kenya from 1971 to 2019 were analyzed using the linear autoregressive distributed lag (ARDL) modeling technique. Further investigated was the connection between a few control variables and economic growth, including net migration, diaspora remittances, the globalization index, imports, and exports. In the short run, the study found that there was statistically significant relationship that leads to overall growth of the economy in Kenya. The positive shocks were seen to propel the short run economic growth. The study also discovered that the variables were statistically insignificant over the long term, meaning that the relationship had greater short-term influence than long-term impact.