Fewer layovers, more investment: MIT research shows how direct flights determine where global companies open branches
It sounds like a small thing: whether you’ll need to change planes once or twice on the way to your destination. But new research by scientists from the Massachusetts Institute of Technology (MIT) suggests that the difference between a direct flight and travel with layovers is not just a matter of comfort, but also of measurable economic impact. By analyzing 30 years of international flights and the expansion of multinational companies, the authors conclude that air connectivity strongly influences decisions about where branches will be opened, with a particular emphasis on sectors in which in-person meetings and fast coordination remain a key part of the business model. At the center of the story is not one airport or one continent, but a pattern of global business mapping that repeats across a large number of countries.
The paper titled
“Air connectivity boosts urban attractiveness for global firms” was published on January 7, 2026 in the journal
Nature Cities, and it focuses on an assumption that is often decisive on the ground: cities that can be reached without layovers, or with a minimal number of layovers, have a higher chance of attracting international investment that follows corporate expansion. The researchers do not claim that air connectivity replaces all other development policies, but that it is a factor that in practice slips into almost every serious investment calculation. In other words, a map of direct routes often behaves like an informal “line” drawn across the map of air routes: it brings some cities closer, while making others—through layovers—feel farther than the kilometers suggest.
What the researchers measured and why the results read as a message to cities
The authors did not look only at the number of flights or the size of airports, but at the overall structure of the global network of international routes and the position of each city within that network. In urban and economic analyses, such an approach is becoming increasingly important, because investment decisions by multinational companies rarely depend on a single factor: what matters is a combination of market access, logistics, labor, the regulatory framework and, as this research shows, the ability to reach business partners quickly and reliably. Air connectivity is not only passenger transport, but a way to “shorten” distances between business centers and enable decisions to be made faster, with less friction. When that effect is summed across thousands of routes and millions of business relationships, the result is a picture that is relevant both for city administrations and for national policies.
In practice, the air network affects the cost and frequency of business travel, the speed of resolving problems “face to face,” and companies’ capacity to oversee branches and projects in distant markets. The researchers particularly emphasize the role of personal meetings in reducing information asymmetry and building trust between business partners, which, according to the authors, is crucial for coordination within multinational corporations. Even in the age of video calls, many processes—from supplier checks and contract negotiations to risk management—are easier to carry out when key locations are accessible by a direct flight. In that sense, air traffic becomes part of the “institutional infrastructure” of business, just like stable regulation or the availability of a qualified workforce. That is also why the study speaks not only about traffic, but about the geographic attractiveness of cities.
Layovers as an economic barrier: what the numbers say
The most direct result of the study concerns layovers and the number of multinational-company branches in individual cities. Comparing pairs of cities connected by a direct flight with pairs that can be reached only via one or two layovers, the authors state that cities connected by routes with one layover had about 20% fewer multinational-company branches than comparable city pairs with a direct flight. When two layovers were needed, the gap rises to about 34% fewer branches. The authors further translate that finding into the dynamics of new firm creation: according to their calculations, this is equivalent to roughly 1.8% fewer new firms per year in the case of a one-layover connection, or about 3.0% fewer new firms per year when two layovers are required.
It is important to emphasize that these are average effects across a large number of countries and cities, not a guarantee that a direct route will automatically produce a new wave of investment. But the pattern is strong enough to fit into the logic of corporate decision-making: locations that are easier to reach become more desirable, especially when regular travel between headquarters and branches is needed. In that sense, the airline map becomes part of the “invisible infrastructure” that decides whether a location is perceived as realistically accessible. Layovers also bring an additional layer of uncertainty: delays, missed connections, schedule changes and higher operating costs are not just an inconvenience, but a risk factor in business planning. That is precisely why the difference between a direct flight and two layovers in the business world is often not marginal, but strategic.
- 142 countries covered by the analysis in the period 1993–2023
- merged datasets on 7.5 million companies and more than 400,000 international air routes
- the analysis focuses on cities with airports (about 800 cities) and on international flights, excluding domestic routes
How the database was built: flights, ownership and the “airport zone”
To reach their conclusions, the authors built a database that combines data on international flights with corporate data on ownership relationships and the structure of multinational companies. For the air-traffic part, they relied on statistics and databases collected by the International Civil Aviation Organization (ICAO), which through its programs and platforms consolidates and standardizes a large portion of global aviation statistics. The corporate part of the analysis is based on the Orbis database, a commercial source of company data used in research and business, containing information on finances, ownership and corporate links. MIT’s presentation of the research also highlighted that such data make it possible to track relationships between parent companies and their subsidiaries, which is crucial for understanding the geography of multinational expansion.
The methodology also includes a spatial criterion: the study includes companies located within 60 kilometers of an airport, aiming to capture the city’s economic zone that realistically relies on air connectivity. The authors also state that in the analytical model they accounted for additional factors that can influence where branches are opened, such as city size, in order to isolate the effect of connectivity within the air network. This approach is important because large cities typically have more flights, but they also have other advantages: larger markets, more developed services and stronger institutions. The goal of the study was to show that the very structure of air links—and not only “city size”—adds an additional explanation for why international branches cluster in certain locations. That shifts the investment question from the sheer number of passengers to the quality of the network and the city’s position within the system of international routes.
Why knowledge industries are more sensitive to air accessibility
One of the stronger emphases of the study concerns differences across sectors. The research shows more pronounced effects in activities that depend on frequent, direct and reliable meetings: finance, professional services, consulting and similar sectors in which coordination between teams and markets is intensive and mistakes are costly. In their interpretation, the authors point out that in such sectors physical presence still has value, even after the rise of digital tools, because key relationships are often built through in-person meetings and rapid information exchange. As an illustration, they also cite operational scenarios in which specialists, auditors or consultants must periodically come on site: if travel is simpler, costs are lower and work organization is more flexible. Ultimately, air accessibility becomes part of a city’s competitive advantage in the global division of labor.
On the other hand, for manufacturing and more logistics-intensive activities, the authors note that road infrastructure, railways, ports and maritime transport will often play a larger relative role. That does not mean air connectivity is unimportant, but that the channels of the “physical economy” differ by sector: what is decisive for financial and service activities may be only an additional benefit for industry. In the real world, multinational companies often choose a combination of locations—production, logistics and management—so the effects of the air network can spill over indirectly, through where management and control functions are placed. That is precisely why the study stresses heterogeneity of effects: the same change in the flight network will not affect all industries equally. Cities that target “knowledge industries” thus get a clearer signal about where investments in connectivity can yield the highest return.
A key nuance: it’s not only the number of direct routes that matters
The study brings another important message: connectivity is not measured only by the number of direct destinations. The simplest measure is the number of direct links, i.e., how many other cities are reachable without a layover; the paper describes this as “degree centrality.” The authors state that, over a 10-year period, a 10% increase in that measure is associated with a rise in the number of branches in a city of about 4.3%. But, as they emphasize, there is an even stronger indicator: a city’s “embeddedness” in the network, i.e., the quality of its connections. That shifts the discussion of air routes from quantity to structure and strategy. In other words, two airports can have a similar number of direct routes, but not the same economic effect, if their connections are directed toward differently “influential” hubs.
Put simply, the question is
who you are connected to, not only
how many connections you have. A city may have a moderate number of direct routes, but if they are aimed at airports and cities that are themselves strongly connected to the rest of the world, that city gains access to a broader global market and “shortens” travel through the network. That is why the paper highlights “eigenvector centrality”—a measure that captures a city’s role in the overall network and its position relative to the most connected hubs. According to the paper’s summary, that measure proved to be the most robust predictor of branch locations, suggesting that “being connected to the connected” is economically more significant than the sheer number of destinations. For cities thinking about how to position themselves, that is the difference between opening random routes and building targeted links to key hubs.
For cities and decision-makers, this is an important nuance. The question is not only “how many flights do we have,” but “are we connected to hubs that open doors to other business centers.” In that sense, a new route to a key international hub can have a larger effect than a greater number of connections to less connected destinations, even though both options at first glance look like improved accessibility. That also explains why two airports with a similar number of passengers can have different “attractiveness” for international branches: the network is not a flat map, but a system in which some points carry more “weight.” In business practice, that translates into whether one can reach key meetings without unnecessary loss of time and without relying on distant communication. The study thus offers a tool for thinking more precisely about what kind of connectivity cities actually need.
What the finding means in the era of videoconferencing and after the pandemic
The authors particularly emphasize the consistency of results across three decades—a period that includes major technological changes, the rise of teleconferencing, business digitalization, and shocks such as the COVID-19 pandemic. Despite these changes, the link between direct international flights and the geography of multinational expansion remains stable. The interpretation the researchers offer boils down to the fact that the need for physical presence did not disappear, but shifted into “critical moments” of business: investment negotiations, trust-building, dispute resolution and coordination of complex projects. That is, according to the authors, part of the reason why the pattern does not “break down” even after the broad adoption of digital communication tools. Technology has eased part of everyday communication, but it has not fully replaced situations in which in-person contact is decisive.
A broader geopolitical context is also emphasized. In times of trade tensions and greater uncertainty, trust and verification of information become more important, increasing the value of channels that enable fast in-person meetings. In other words, the more complex the global environment, the more reasons companies have to choose locations that can be reached without additional logistical obstacles. In such an environment, even a “small” obstacle, like two layovers, can become a factor that repeats in corporate planning year after year. Air connectivity is thus not only infrastructure for tourism, but also a backbone of global business relationships. The study shows that this backbone has withstood technological and social changes that many considered a turning point.
Implications for public policy: airports, routes and regional competition
For city administrations and national governments, the study’s findings raise a sensitive question: where is the line between legitimate investment policy and a “race” among cities to subsidize air routes. The research does not claim that every opening of a new international route is automatically worthwhile, nor that airport expansion can replace strategic city development planning. But it suggests that air connectivity is an element of infrastructure that enters multinational companies’ calculations, especially in sectors where teams are dispersed worldwide and coordination is continuous. This also implies that public debates about airports should not be conducted solely through passenger numbers, but also through the quality of the network and access to key hubs. Cities and regions that rely on travel via distant hubs may be competitive on other criteria, but in this segment they carry a structural handicap.
In practice, planning air connectivity should not be separated from policies of attracting investment, developing business zones, building an academic and innovation ecosystem, and positioning the city internationally. If a city wants to attract regional offices, development centers or complex professional services, the availability of direct flights to key business hubs becomes part of “hard” infrastructure just like high-speed rail, digital connectivity or congress-industry capacity. Still, the authors implicitly also stress caution: connectivity by itself does not produce economic development if there is no environment that can absorb investment. A direct flight can open the door, but the door leads nowhere if the city lacks sufficient competencies, institutional stability and business dynamism. That is why the study’s findings are most valuable as part of a broader picture, not as a standalone “formula” for growth.
Transparency and reproducibility: data and code publicly available
At a time when science is increasingly expected to be reproducible, the paper states that a compiled version of the data and the analytical code are available via the Code Ocean platform, which is also visible on the article page. Such a move enables other researchers to verify the results, extend the analysis, or apply it to other questions—for example, the impact of new routes after a terminal opening, network changes after crises, or differences across regions. For both expert and broader audiences, this is an important detail because it shows that key conclusions rely not only on interpretation but also on a more open approach to methodology. In topics like this, where economics, transport policy and urban strategy intersect, data transparency helps also because it reduces room for arbitrary interpretations. In other words, the argument about the importance of direct flights here is supported by a measurable, verifiable trail.
In the end, the research reminds us that cities in the global economy are connected not only by telecommunications and capital, but also by very concrete routes on the world map. In the era of the digital economy, it is easy to forget that trust, negotiations and coordination often still happen in a room, not on a screen—and that the map of direct flights, like the map of investments, ultimately says who is truly close to whom. As cities compete for new offices, service centers and innovation teams, it seems that one of the oldest lessons of international business still holds: when you can arrive faster and more directly, the probability of becoming commercially “rooted” there increases.
Sources:- - MIT News (Massachusetts Institute of Technology) – news and a summary of the research and key numerical findings ( link )
- - Nature Cities (Nature Portfolio) – the scientific paper page with publication date and abstract ( link )
- - Springer Nature / Nature Portfolio – information about the launch of the journal Nature Cities and a description of its scope ( link )
- - ICAO (International Civil Aviation Organization) – official page about the program and the availability of aviation statistics ( link )
- - Moody’s – Orbis (BvD is now Moody’s) – description of the company database used in the research ( link )
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