Border and Behind-the-Border Trade Barriers and Country Exports

34 Pages Posted: 31 Dec 2007

See all articles by Azim M. Sadikov

Azim M. Sadikov

International Monetary Fund (IMF)

Date Written: December 2007

Abstract

How do signatures required for exporting and business registration procedures affect the volume and composition of country's exports? To answer this question, I develop a model where a country can export two types of products: differentiated and homogeneous. I show that export signatures and registration procedures reduce overall exports by increasing transaction costs. The impact, however, varies across goods according to the product's degree of differentiation - the lack of price data on differentiated products due to their heterogeneity makes them more sensitive to export signatures. Regressions show that each extra signature exporters have to collect before a shipment can take place reduces aggregate exports by 4.2 percent. The impact is large, equivalent to raising importer's tariff by 5 percentage points. Furthermore, each signature lowers exports of differentiated products by 4-5 percent more than exports of homogeneous goods. I find evidence that business registration procedures affect exports of differentiated products only.

Keywords: Trade policy, Exports, Tariffs

Suggested Citation

Sadikov, Azim M., Border and Behind-the-Border Trade Barriers and Country Exports (December 2007). IMF Working Paper No. 07/292, Available at SSRN: https://ssrn.com/abstract=1079220

Azim M. Sadikov (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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