Abstract
This study analyses the causal and long-run linkage between air transport and economic growth. It was conducted to validate the tourism-led growth hypothesis for the United States (US) during the period 1981–2017 and includes Information and Communication Technologies (ICTs) alongside coal rents in the tourism-led growth hypothesis. This study presents a new direction for future studies by considering the relevance of the fourth industrial revolution (Industry 4.0), particularly in the US. To achieve the stated claim, this study considers as additional explanatory variables how ICTs moderate the impact of Foreign Direct Investment (FDI) on GDP. The empirical result confirms a connection between the Industry 4.0 era and the role of ICTs, which promotes substantial changes in the way of life and productivity. This has led to a vast technological advancement, which is in line with but at a faster pace than the technological advancement of previous revolutions. From empirical results, the study provides relevant policy recommendations related to the role of natural resources, new technologies and tourism on US GDP, while it also provides evidence of the positive effect of ICTs over FDI under the Industry 4.0 era.
5. Concluding remarks and policy recommendations
Although previous literature has investigated the role that air transport plays in economic growth, this study advances the exploration of air transport on economic growth under the TLGH framework by considering the relevance of Industry 4.0 in the US during the period 1981–2017. By filling this gap in the empirical literature, this study provides fresh evidence in the TLGH, considering coal rents, ICTs and FDI as additional explanatory variables. The empirical results, obtained from FMOLS, DOLS and CCR, confirm that investments in aviation infrastructure and support services are needed to enable sustainable strategic planning, providing an essential tool for the assessment of potential scenarios; where the tourism sector must be considered as the key to economic recovery and a critical factor in the development of the tourism sector. While the air transport industry makes a significant direct and indirect contribution to national income, the catalytic effects are evident in the US tourism sector. This contribution to GDP implies the necessity of studying the relationship between aviation and tourism. A limitation that has affected tourism growth is aviation industry policies, whether regulatory or not.
