Product standards and margins of trade: Firm-level evidence

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We address the trade effect of restrictive product standards on the margins of trade, by matching a detailed panel of French firm exports with a new database compiling the list of Sanitary and Phyto-Sanitary regulatory measures that have been raised as a concern in dedicated committees of the WTO. By using specific trade concerns to capture the degree of restrictiveness of product standards we focus only on standards that are perceived as a barrier to trade. We analyse their effects on three trade related aspects: (i) probability to export and to exit the export market (firm-product extensive margins), (ii) value exported (firm-product intensive margin) and (iii) export prices. We find that SPS concerns discourage the presence of French exporters in SPS-imposing foreign markets. We also find a negative effect of SPS imposition on the intensive margins of trade. Finally, the former negative effects of SPS are attenuated for big firms. Terms of use: Documents inJEL-Code: F120, F150.

Learning, prices and firm dynamics

“…Our model is therefore able to match recent evidence indicating that standards reduce entry in export markets and lead to an increase in product prices, especially among small exporters (Fontagné et al. ).…”

International Agreements on Product Standards Under Consumption Externalities: National Treatment Versus Mutual Recognition

“…While I have suppressed the details, raising the standards in either country increases local prices and reduces the intensive margin of trade. This is consistent with the empirical findings in Fontagné et al ().…”

Trade Policy and Market Power: Firm‐level Evidence

“…Fontagné et al. () use French firm‐level data to show that SPS concerns raised at the WTO entail compliance costs, raising unit values and inhibiting entry. In Fernandes et al.…”

“…Fontagné et al. () 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.…”