20 years with the Schengen Area - Does it boost trade?
Sammanfattning: The Schengen Agreement was implemented 1995 between seven nations, making it easier for Europeans to travel and work by removing internal borders. The area has expanded since its inception and today includes 26 nations. Internal borders have, however, been reintroduced in the aftermath of the refugee crisis. An interesting question is therefore whether the Schengen Agreement brought any benefits to the trade with goods. This thesis investigates if the Schengen Agreement has increased bilateral trade with goods. The author uses a gravity model and estimates it with a Poisson pseudomaximum-likelihood estimator. The results suggest that import value increases with 3.6 percent if the both countries are a part of the Schengen area.
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