Trade Effects of the Austria's EU Membership, 25 Years After the Referendum

On 12 April 1994, Austria held a referendum on its potential accession to the European Union. 66.6 percent of the participants voted in favour of an EU membership and, as a consequence, Austria joined the EU at 1 January 1995. 25 years after this referendum, this study quantifies the trade and welfare effects induced by Austrians EU membership. In a first step and by making use of a gravity model, the study calculates the trade effects of Austria's EU membership. Accordingly, in the long run Austria trades about 46 percent more goods with the other EU countries. This trade effect is then implemented into WIFO's Adagio input output model in order to assess the GDP, employment and price effects of Austria's EU membership. The findings suggest that Austria's real GDP grew by about 0.7 percent p.a. faster due to Austria's accession to the EU.