Tall paper walls: the political economy of visas and cross‐border travel

McKay, Andy and Tekleselassie, Tsegay G (2018) Tall paper walls: the political economy of visas and cross‐border travel. World Economy, 41 (11). pp. 2914-2933. ISSN 0378-5920

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Cross‐border travel for business, personal and tourism purposes is an important component of trade in services. In 2013, travel accounted for 25% of services export in the world. Trade in services accounted for 12% of GDP in the world. Hence, the role of travel in many economies is substantial. The current paper studies the determinants of cross‐border flows of people with a particular emphasis on the role of visa policies. We adopt the UN General Assembly Affinity Index, a measure of the quality of bilateral relations between nations, to instrument for bilateral visa policy. We find that, ceteris paribus, imposing visa restrictions on a country reduces travel from that country by about 73% in 2010 implying restrictive visa policies discourage cross‐border travel significantly. This implies an adverse impact of restrictive visa policies on trade‐in‐services.

Item Type: Article
Schools and Departments: University of Sussex Business School > Economics
Depositing User: Andy McKay
Date Deposited: 26 Jun 2019 14:42
Last Modified: 01 Jul 2019 11:45
URI: http://sro.sussex.ac.uk/id/eprint/84600

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