ABSTRACT
This chapter aims to provide an assessment of the issues involved here by isolating bidirectional short- and long-run causality between regional air transport activity and economic growth in their relevant regions. Infrastructure is often considered to be critical as a factor for the growth and development of countries and regions. Air transport is an important structure in the connection of regions. The empirical analysis was conducted using annual data on total airport passenger movements, and growth data (GDP) by regions for the period 1995-2015 for Bulgaria. The chapter aims to establish the first empirical evidence for determining causal relationships between regional aviation/airports and economic growth in Bulgaria. The results clearly demonstrate the long-run causalities between air transport and the local economy only in one direction the growth in GDP causes the growth in the number of the passengers. Economic growth is usually understood as growth of output, growth of output per worker, or growth of output per capita.
