Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation
54 Pages Posted: 12 Feb 2006
Date Written: December 2001
Abstract
A comprehensive empirical investigation is carried out to ascertain the import-reducing effect of trade protection barriers. We first present a statistical summary of the status of global trade protection. Then, based on a monopolistic competition trade model and 1994 cross-country data on trade barriers, trade flows, and production, we estimate the import-reducing effect of trade barriers including both tariffs and non-tariff barriers (NTBs). We use the disaggregated cross-country, cross-industry data on manufactured goods and, unlike previous studies, our sample covers a broad range of countries - more than 70 in total - including countries from the most developed ones like those in the Group of Seven to the least developed one, Bangladesh. We specify an empirical model that captures the stylized facts well and helps generate sensible estimates. Our econometric framework is designed to control for the simultaneous determination of trade flows, trade barriers, and production. We find that both tariff and NTBs are quite significant in restricting imports.
Keywords: Trade-Barriers, Tariff, non-tariff trade barriers
JEL Classification: C5, F1
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Estimating Trade Restrictiveness Indices
By Marcelo Olarreaga, Hiau Looi Kee, ...
-
Estimating Trade Restrictiveness Indices
By Hiau Looi Kee, Marcelo Olarreaga, ...
-
Import Demand Elasticities and Trade Distortions
By Hiau Looi Kee, Marcelo Olarreaga, ...
-
Import Demand Elasticities and Trade Distortions
By Marcelo Olarreaga, Hiau Looi Kee, ...
-
The Mercantilist Index of Trade Policy
By James E. Anderson and J. Peter Neary
-
Trade Barriers and Trade Flows Across Countries and Industries
By Jong W. Lee and Phillip Swagel
-
Measuring Effects of Trade Policy Distortions: How Far Have We Come?
By Kym Anderson