An evolutionary approach to air transport: market, technology and institutional co-evolution

This paper covers the development dynamics of the air transportation industry. Having the evolutionary economic geography as the frame of reference, we analyze the co-evolution of the market (selective environment), the aeronautics knowledge and equipment (technology) and the air transportation institutional policy (policy). The stress is on those factors affecting network formation and tie selection. The results of this investigation add to the limited empirical research on the evolution of transport network systems. We found that air transport shows a path dependency; although at the same time has a strong level of uncertainty due to exogenous factors. Also, the co-evolution between the selective market environment, technology and institutional decisions has been verified. The latter happen to be key, as the evolution of air transportation can only be understood in the context of a mixed regulatory environment that provides different levels of freedom for network formation.