Visa Restrictions and Economic Globalisation

Applied Geography, 84, 2017, pp.75-82

21 Pages Posted: 26 Jun 2018

See all articles by Mathias Czaika

Mathias Czaika

University of Oxford - Department of International Development

Eric Neumayer

London School of Economics and Political Science (LSE)

Date Written: 2017

Abstract

The cross-border mobility of people, goods and services, and capital has expanded enormously both in intensity and diversity over recent decades. States have a general interest in facilitating these flows in order to benefit from economic globalisation. Yet, mainly due to security concerns, most governments grant visa-free mobility only very selectively. Drawing on a new bilateral visa policy database covering up to 194 destination and 214 origin countries over the 1995 to 2013 period, our analysis finds that the introduction of a visa restriction by a destination country for citizens from a particular origin country deters tourism inflows by about 20 per cent. Visa restrictions also reduce bilateral trade and foreign investment, but to a smaller extent than previous studies have suggested. We further find that some of the deterred flows in tourists and goods and services are redirected to other (visa-free) destinations. This deterrence-cum-deflection effect of restrictive visa policies implies significant economic costs for both visa-issuing and visa-targeted countries, but it creates some positive externalities for countries with a more liberal visa policy. Liberalised visa policies would in particular help poorer countries to partake more in the benefits of economic globalisation.

Keywords: visa restrictions, globalisation, spatial deflection, tourism, visitors, trade, foreign direct investment

Suggested Citation

Czaika, Mathias and Neumayer, Eric, Visa Restrictions and Economic Globalisation (2017). Applied Geography, 84, 2017, pp.75-82. Available at SSRN: https://ssrn.com/abstract=3198515

Mathias Czaika

University of Oxford - Department of International Development ( email )

3 Mansfield Road
Oxford, OX1 3TB
United Kingdom
+44(0)1865 271533 (Phone)

Eric Neumayer (Contact Author)

London School of Economics and Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 207 955 7598 (Phone)
+44 207 955 7412 (Fax)

HOME PAGE: http://personal.lse.ac.uk/neumayer

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