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The Trade Effects of Border Controls: Evidence from the European Schengen Agreement

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  • Gabriel Felbermayr
  • Jasmin Katrin Gröschl
  • Thomas Steinwachs

Abstract

The Schengen agreement has guaranteed unchecked travel across internal EU borders since 1995. Has it also facilitated trade flows? Our econometric analysis suggests that Schengen has boosted trade by 3% on average (equivalent to a drop in tariffs by 0.7 percentage points). Goods trade is more robustly affected than services, and peripheral countries benefit more than central ones.

Suggested Citation

  • Gabriel Felbermayr & Jasmin Katrin Gröschl & Thomas Steinwachs, 2016. "The Trade Effects of Border Controls: Evidence from the European Schengen Agreement," ifo Working Paper Series 213, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  • Handle: RePEc:ces:ifowps:_213
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    Cited by:

    1. Campbell, Douglas L. & Chentsov, Aleksandr, 2017. "Breaking Badly: The Currency Union Effect on Trade," MPRA Paper 79973, University Library of Munich, Germany.
    2. Patrick Bisciari, 2019. "A survey of the long-term impact of Brexit on the UK and the EU27 economies," Working Paper Research 366, National Bank of Belgium.
    3. Kern, Milena & Paetzold, Joerg & Winner, Hannes, 2018. "Cutting Red Tape for Trade in Services," Working Papers in Economics 2018-9, University of Salzburg.
    4. Gabriel Felbermayr & Jasmin Katrin Gröschl & Inga Heiland, 2018. "Undoing Europe in a New Quantitative Trade Model," ifo Working Paper Series 250, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Karmann Alexander & Rösel Felix & Schneider Markus, 2016. "Produktivitätsmotor Gesundheitswirtschaft: Finanziert sich der medizinisch-technische Fortschritt selbst?," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(1), pages 54-67, April.
    6. Andreas Dür & Christoph Moser & Gabriele Spilker, 0. "The political economy of the European Union," The Review of International Organizations, Springer, vol. 0, pages 1-12.
    7. L´Hotellerie-Fallois, Pilar & Vergara Caffarelli, Filippo & Geeroms, Hans & de Almeida, Ana M. & Bisciari, Patrick & Byrne, Stephen & Campos, Rodolfo & Conefrey, Thomas & Cappariello, Rita & Damjanovi, 2020. "A review of economic analyses on the potential impact of Brexit," Occasional Paper Series 249, European Central Bank.
    8. Ireneusz Pawel Karolewski & Roland Benedikter, 2017. "Europe’s Refugee and Migrant Crisis: Economic and Political Ambivalences," Challenge, Taylor & Francis Journals, vol. 60(3), pages 294-320, May.
    9. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik, 2020. "The Cost of Borders: Evidence from the Eurasian Customs Union," Hannover Economic Papers (HEP) dp-664, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    10. Alejandro Buesa & Coral García & Iván Kataryniuk & César Martín-Machuca & Susana Moreno & Moritz Roth, 2020. "Brexit: situation and economic consequences," Economic Bulletin, Banco de España, issue 4/2020, pages 1-12.
    11. Andreas Dür & Christoph Moser & Gabriele Spilker, 2020. "The political economy of the European Union," The Review of International Organizations, Springer, vol. 15(3), pages 561-572, July.
    12. Gabriel Felbermayr & Jasmin Katrin Gröschl & Benjamin Jung, 2017. "Deutschland seit dem Fall des Eisernen Vorhangs: Die Realeinkommenseffekte der zunehmenden Integration in die Weltwirtschaft," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(22), pages 30-37, November.

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    More about this item

    Keywords

    Trade Integration; Schengen Agreement; Gravity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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