Unpacking the digital divide: Heterogeneous effects of open sky agreements on air transport network centrality amid internet regulation constraints

Abstract

The OSA is a comprehensive framework that facilitates unrestricted air transport between partnering countries, promoting unlimited flight rights and minimal operational constraints. We examine the impact of entering into a bilateral air service agreement, particularly the OSA, with the United States. The OSA facilitates unrestricted air transport, fostering increased flight volume and global network centrality. Our analysis indicates a significant positive effect on network centrality over time for countries that entered into the OSA with the U.S. However, this effect on network expansion is influenced by a country's level of internet information control, such as controls of information dissemination, with stricter regulations weakening the benefits of the OSA. While previous studies emphasize the economic advantages of OSA, our research highlights the role of internet regulations in shaping these outcomes. We propose that policymakers leverage OSA to stimulate economic growth, particularly through tourism promotion and fostering liberalization and competition of airline industry.