The power of wings: How air connections fuel cross-regional collaboration in China?

How does physical connectedness stimulate knowledge cocreation? This paper sheds new light on this question by focusing on China, one of the largest countries and innovation powerhouses in the world. Exploiting variation in air connectivity across time and space, we find that the introduction of non-stop air connections between cities boosts collaborative innovation, especially for long-distance city pairs. This improvement goes with reducing costs of face-to-face interactions, hence promoting knowledge flows. Further analysis shows that the disparity of within-city-pair innovative capability shrinks following direct air connections. The effects on co-innovation are more pronounced for collaborations: (1) between mega-and small cities, (2) involving at least one cost-sensitive enterprise participant, and (3) across corporate group boundaries among enterprise innovators.