Let's Try Next Door: Technical Barriers to Trade and Multi-Destination Firms

46 Pages Posted: 28 Sep 2016

See all articles by Lionel Fontagne

Lionel Fontagne

University of Paris 1 Panthéon Sorbonne; Paris School of Economics; CEPII

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: August 09, 2016

Abstract

Stringent Technical Barriers to Trade (TBT) are expected to drive exporters out of the markets imposing these hurdles. However their impact will vary, with some exporters being able to refocus on TBT-free markets. By matching a database of TBT measures raised as concerns at the WTO (Specific Trade Concerns - STCs), with a firm-level panel of French exporters, we show the complex effects of restrictive TBT measures on the different margins of trade. We show that the negative effect of TBT on export participation is magnified for multi-destination firms, which can divert their exports towards TBT-free destinations. Moreover, we conduct aggregate level estimations to show that the effect of stringent TBTs in reducing export ows is magnified in more homogeneous sectors. Observing the shape of the firm distribution at sectoral level and the aggregate elasticity of export to trade cost, we shed light on the fixed component of the additional cost imposed by TBTs on exporters.

Keywords: non-tariff measures, TBT, multi-destination firms, trade margins

JEL Classification: F130, F140

Suggested Citation

Fontagne, Lionel and Orefice, Gianluca, Let's Try Next Door: Technical Barriers to Trade and Multi-Destination Firms (August 09, 2016). CESifo Working Paper Series No. 6031, Available at SSRN: https://ssrn.com/abstract=2844097

Lionel Fontagne (Contact Author)

University of Paris 1 Panthéon Sorbonne ( email )

Maison des Sciences Economiques
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Paris, 75013
France
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+33 1 53 68 55 01 (Fax)

HOME PAGE: http://lionelfontagne.weebly.com/

Paris School of Economics ( email )

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Paris, 75014 75014
France
+33 1 44 07 89 94 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

CEPII ( email )

9 Rue Georges Pitard
Paris, 75015
France
+33 1 53 68 55 06 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

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