Trade Policy and Market Power: Firm‐level Evidence

Asprilla, Alan; Berman, Nicolas; Cadot, Olivier; Jaud, Melise

doi:10.1111/iere.12409

Cited by 21 publications

(7 citation statements)

References 67 publications

(124 reference statements)

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“…Finally, and in accordance with the evidence in Asprilla et al (2019), exporters facing higher tariffs in the destination markets adopt pricing to market strategies, by setting lower export prices when tariffs increase, thus revealing a loss of market power consistent with rentshifting effects. Indeed, tariffs induce firms to export higher quality products but at a significantly lower quality-adjusted price.…”

Section: Results In Tablesupporting

confidence: 78%

“…In addition, by working at the firm level and exploiting heterogeneous effects across firms, we can explore to what extent standards actually discriminate against small and less productive firms and, indirectly, how they affect competition in the destination markets. From this perspective, our findings appear in line with the intuition of Asprilla et al (2019). According to these authors, contrary to tariffs that reduce competition (and market power) of foreign firms through classic rent-shifting effects, NTMs alter competition by reinforcing the market power of surviving exporting firms, and are detrimental especially for smaller firms.…”

Section: Introductionsupporting

confidence: 88%

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Standards, trade margins and product quality: Firm-level evidence from Peru

et al. 2020

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The ongoing debate on whether agri-food (public) regulatory standards are barriers or catalysts to trade is particularly pertinent for developing countries who are often standardtakers. Current evidence on the trade effects of regulatory standards is ambiguous. In this paper, we give a contribution focusing on the firm heterogeneity trade effects of (different) types of agri-food standards, considering firm-level exports from Peru. Particular emphasis is given to standards with different degree of restrictiveness, such as specific trade concerns (STCs) raised on the most stringent NTMs, and to product-quality upgrading. Results show that only the most restrictive NTMs significantly limit agri-food exports for Peruvian firms, affecting the probability to tr trade. Importantly, we uncovered relevant heterogonous effects of NTMs on firms of different size, showing that only the most stringent standards result in product quality upgrading.

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Section: Results In Tablesupporting

confidence: 78%

Section: Introductionsupporting

confidence: 88%

Standards, trade margins and product quality: Firm-level evidence from Peru

et al. 2020

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“…First, we show that an increase in the notification of SPS measures in an importing country limits agricultural export growth by reducing the varieties of commodities traded, the value of commodities traded, the quantity and price of commodities traded. These findings are consistent with existing works on SPS/TBTs measure [ 8 , 36 , 37 ] and existing works on import standards [ 38 ]. SPS measures play as the cost-added trade barriers, which will raise the variable trade cost and fixed trade cost, and induce the selection effect [ 2 , 24 , 39 ].…”

Section: Discussionsupporting

confidence: 93%

Effects of heterogeneous SPS measures on agricultural growth: Evidence from China

et al. 2022

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In order to explore the sustainable growth of Chinese agriculture, this paper assesses how the heterogeneous SPS measures affect China’s growth margins and quality upgrading in the agricultural sector. We estimate improved gravity-model that exploit the cross-country differences in SPS measures over the period from 2000 to 2014. Our findings show that the heterogeneous SPS measures restrict the intensive margin and extensive margin, but significantly promote the product quality-even with no significant effect on price index. Conditional on quality upgrading, the heterogeneous SPS measures decrease the extent of quality upgrading. On one hand, because of cross-country differences in SPS standards, standards from developed countries have less effective trade effect on China’s agri-products export quality upgrading; On the other hand, because of cross-firm differences in the ability to deal with SPS standards, the laggards in China have the higher probability to switch to lower entrance barrier countries. Therefore, it is possible for China to trap in the low-quality agricultural growth in the long term.

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“…It may also be misleading to consider AVEs of NTMs as a pure trade-cost effect. The change in market structure-e.g., small firms exiting the market because they cannot comply with NTMs-induced by standards confers more market power to surviving firms (Asprilla et al, 2019) who may then charge higher prices (Fiankor et al, 2020). Thus, the increase in trade unit values captures the effect of NTM compliance costs, but may also be a market concentration effect (Cadot et al, 2018b).…”

Section: Discussionmentioning

confidence: 99%