Innovation on Wings: Nonstop Flights and Firm Innovation in the Global Context

Forthcoming in Management Science

113 Pages Posted: 22 Nov 2022

See all articles by Dany Bahar

Dany Bahar

Brown University

Prithwiraj Choudhury

Harvard University - Business School (HBS)

Do Yoon Kim

Boston College

Wesley W Koo

Johns Hopkins University - Carey Business School

Date Written: November 20, 2022

Abstract

We study whether, when, and how better connectivity through nonstop flights leads to positive innovation outcomes for firms in the global context. Using unique data of all flights emanating from 5,015 airports around the globe from 2005 to 2015 and exploiting a regression discontinuity framework, we report that a 10% increase in nonstop flights between two locations leads to a 3.4% increase in citations and a 1.4% increase in the production of collaborative patents between those locations. This effect is driven primarily by firms, as opposed to by academic institutions. We further study the characteristics of firms and firm locations that are salient to the relation between nonstop flights and innovation outcomes across countries. Using a gravity model, we posit and find that the positive effect of nonstop flights on innovation is stronger for firms and subsidiaries with greater innovation mass (e.g., stocks of inventors and R&D spending), for firms and subsidiaries located in innovation hubs or in countries that are deemed technology leaders, and for firm and subsidiaries that are separated by large cultural or temporal distance.

Keywords: flight connectivity, global knowledge, cultural distance, temporal distance, innovation mass

JEL Classification: F22, F23, J61, L91, L93, O31, O32

Suggested Citation

Bahar, Dany and Choudhury, Prithwiraj and Kim, Do Yoon and Koo, Wesley W, Innovation on Wings: Nonstop Flights and Firm Innovation in the Global Context (November 20, 2022). Forthcoming in Management Science, Available at SSRN: https://ssrn.com/abstract=4282331

Dany Bahar

Brown University ( email )

Box 1860
Providence, RI 02912
United States

Prithwiraj Choudhury

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Do Yoon Kim

Boston College

Wesley W Koo (Contact Author)

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

HOME PAGE: http://https://sites.google.com/view/wesleywkoo

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