Working Paper

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

Gabriel Felbermayr, Jasmin Katrin Gröschl, Thomas Steinwachs
ifo Institut, München, 2016

Ifo Working Paper No. 213

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.

Schlagwörter: Trade Integration, Schengen Agreement, Gravity
JEL Klassifikation: F100, F150, N740, N940