Let’s try next door: Technical Barriers to Trade and multi-destination firms

Abstract

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Trade Policy and Market Power: Firm‐level Evidence

“…Extensive and Intensive Margin. One way to have a closer look at the channels through which trade policy affect PTMs is to run regressions akin to Fernandes et al (2015) and Fontagné et al (2015), that is, to regress measures of the intensive and extensive margins of trade on NTMs and tariffs, either at the firm or at the product level. In order to conserve space, the results are reported in Table 7 and in Table A.35 of the online appendix Subsection C.17.…”

“…Interestingly, they show that these effects are not neutral on the distribution of firms, as smaller ones seem to react more strongly. Using a similar strategy, Fontagné and Orefice () study technical barriers to trade (TBT) concerns instead and show that firms' exit probability increases in destinations with restrictive TBTs, an effect that is magnified in multidestination firms who are able to divert their exports to TBT‐free destinations. Fernandes et al.…”

“…We provide a number of complementary results that are in line with this interpretation. In particular, we perform exercises in the spirit of Fernandes et al (2015) and Fontagné et al (2015) and regress measures of the intensive and extensive margins of trade on NTMs and tariffs at the firm and product levels. We show that higher NTMs in a given market are associated with fewer exporters and more concentrated sales, and, if anything, they have a slightly positive effect on import shares.…”

“…We also contribute to the recent literature documenting the effect of tariffs and NTMs on exporters' performance. Fontagné et al (2015) use French firm-level data and show that sanitary and phytosanitary (SPS) concerns raised at the WTO increase firms' unit values and inhibit their entry. Interestingly, they show that these effects are not neutral on the distribution of firms, as smaller ones seem to react more strongly.…”

Brief Analyses of Technical Barriers to Trade— Based on the Case of Lighters in Wenzhou

“…Besides, Gianluca Orefice (2017) [2] proposed that the degree that labor-intensive products affected by TBT is greater than technology-intensive products' or capital-intensive products'. Technology content of our country's labor and resource intensive products is lower than developed countries, these kinds of products cannot meet the requirements of technology standards of developing countries, thus they encounter TBT.…”