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

Author

Listed:
  • Lionel Fontagné

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Gianluca Orefice

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

Abstract

Stringent Technical Barriers to Trade (TBT) are expected to drive exporters out of the markets imposing these hurdles. In addition, more able multi-destination exporters can refocus on TBT-free markets and reorient their exports. 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 flows is magnified in more homogeneous sectors. Observing the shape of the firm distribution at sectoral level and the aggregate response of export to trade cost, we shed light on the fixed component of the additional cost imposed by TBTs on exporters.

Suggested Citation

  • Lionel Fontagné & Gianluca Orefice, 2018. "Let’s try next door: Technical Barriers to Trade and multi-destination firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01665840, HAL.
    • Handle: RePEc:hal:cesptp:hal-01665840
    DOI: 10.1016/j.euroecorev.2017.11.002
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    More about this item

    Keywords

    Trade Margins; TBT; Multi-destination Firms; Trade Margins JEL Codes: F13; Non-tariff measures;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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