Air Connectivity: The Secret Behind Expanding Multinational Firms

A recent study highlights the crucial role of air connectivity in the expansion of multinational firms. Cities with direct flight access see a higher presence of subsidiaries, underscoring the importance of convenient air travel for business growth, despite technological advancements in communication.

A groundbreaking study reveals the pivotal role air connectivity plays in the expansion of multinational companies. Conducted across 800 cities with airports, it found subsidiaries are more likely to be established in cities accessible by direct flights.

The research suggests a 10% rise in a city's air connectivity over a decade increases subsidiary numbers by 4.3%, showcasing the indelible link between air routes and business expansion. Published in Nature Cities, the findings emphasize the necessity of direct air travel for fostering face-to-face interactions, trust, and information flow.

Despite teleconferencing advancements and COVID-19's impact on global business, direct flights remain a key factor in multinational firm growth, particularly in knowledge-driven sectors like finance. The study highlights cities risk being sidelined in the corporate investment landscape without robust air travel infrastructure.

(With inputs from agencies.)