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Felbermayr, Gabriel; Gröschl, Jasmin Katrin; Steinwachs, Thomas (April 2016): The Trade Effects of Border Controls. Evidence from the European Schengen Agreement. Ifo Working Paper No. 213
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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.