Does Air Transportation Contribute to Agricultural Economic Development in Korea? Evidence from Directed Acyclic Graph and Bayesian Vector Autoregressive Approaches

Air transportation is expected to lead to agricultural economic growth by promoting exports, considering the perishable characteristics of agricultural products and the fast delivery time of air transportation. This study explores the linkage of the air transportation–agricultural economic development nexus in South Korea. Specifically, we utilize a directed acyclic graph (DAG) and Bayesian vector autoregressive model (BVAR)-based impulse response function (IRF) as well as forecast error variance decomposition (FEVD). The DAG, IRF and FEVD results show that air transportation contributes to agricultural economic growth in Korea. However, agricultural inputs, labour and capital do not play a crucial role in agricultural development. Our results imply that policies connecting air transportation and agricultural trade are expected to contribute to agricultural economic growth.