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.

Mathias Czaika and Eric Neumayer (2017) ‘Visa restrictions and economic globalisation’ in Applied Geography, DOI: 10.1016/j.apgeog.2017.04.011