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Making small firms happy? The heterogeneous effect of trade facilitation measures

Author

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  • Lionel Fontagné

    (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

    (Centre d'Etudes Prospectives et d'Informations Internationales)

  • Roberta Piermartini

    (WTO)

Abstract

The different facets of trade facilitation may impact het-erogeneously exporters of different size and productivity. Using the cross-sectional variation in procedures at the border, we identify how red tape affects trade through the extensive and/or the intensive margin and show that small and large exporters are affected differently. We observe that while information availability benefits both small and large exporters, other measures like advance ruling, appeal proce-dures and the automation of border formalities tend to favor large exporters. This result suggests that trade facilitation policies affect exporters through channels other than simply the fixed or variable cost component of the red tape barriers. Beyond affecting the size and composition of trade flows, uncertainty about the conditions of crossing borders plays an important role in shaping the demography of exporters across different destinations.

Suggested Citation

  • Lionel Fontagné & Gianluca Orefice & Roberta Piermartini, 2020. "Making small firms happy? The heterogeneous effect of trade facilitation measures," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02444887, HAL.
    • Handle: RePEc:hal:cesptp:hal-02444887
    DOI: 10.1111/roie.12463
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    3. Vincent Rebeyrol, 2023. "Protection Without Discrimination," The Economic Journal, Royal Economic Society, vol. 133(655), pages 2807-2827.
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    5. Christian Volpe Martincus, 2016. "Out of the Border Labyrinth: An Assessment of Trade Facilitation Initiatives in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 96856, February.
    6. Aggarwal, Sakshi & Chakraborty, Debashis, 2017. "Determinants of India’s Bilateral Intra-Industry Trade over 2001-15: Empirical Results," MPRA Paper 78020, University Library of Munich, Germany.
    7. Olarreaga, Marcelo & Fugazza, Marco & Ugarte, Cristian, 2018. "On the heterogeneous effects of market access barriers: evidence from small and large Peruvian exporters," CEPR Discussion Papers 12876, C.E.P.R. Discussion Papers.
    8. Lee,Woori & Rocha Gaffurri,Nadia Patrizia & Ruta,Michele, 2021. "Trade Facilitation Provisions in Preferential Trade Agreements : Impact on Peru’s Exporters," Policy Research Working Paper Series 9674, The World Bank.
    9. Beverelli, Cosimo & Ticku, Rohit, 2022. "Reducing tariff evasion: The role of trade facilitation," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 534-554.
    10. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2018. "Transportation and trade interactions: a trade facilitation perspective," Chapters, in: Bruce A. Blonigen & Wesley W. Wilson (ed.), Handbook of International Trade and Transportation, chapter 14, pages 422-450, Edward Elgar Publishing.
    11. Alessandro Nicita & Enxhi Tresa, 2022. "Trade policy and trade resilience during the 2020 trade downturn," UNCTAD Working Papers #1, United Nations Conference on Trade and Development.
    12. Giovanni Maggi & Monika Mrázová & J. Peter Neary, 2022. "Choked By Red Tape? The Political Economy Of Wasteful Trade Barriers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 161-188, February.
    13. Beverelli, Cosimo & Gourevich, Isabella & Heiland, Inga & Keck, Alexander & Larch, Mario & Yotov, Yoto, 2023. "Trade and welfare effects of the WTO Trade Facilitation Agreement," WTO Staff Working Papers ERSD-2023-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    14. Russell Hillberry & Carlos Zurita, 2022. "Commitment behaviour in the World Trade Organization's Trade Facilitation Agreement," The World Economy, Wiley Blackwell, vol. 45(1), pages 36-75, January.
    15. Ben Shepherd, 2022. "Modelling global value chains: From trade costs to policy impacts," The World Economy, Wiley Blackwell, vol. 45(8), pages 2478-2509, August.
    16. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2017. "Transportation and Trade Interactions: A Trade Facilitation Perspective," IDB Publications (Working Papers) 97957, Inter-American Development Bank.
    17. Hendy, Rana & Zaki, Chahir, 2021. "Trade facilitation and firms exports: Evidence from customs data," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 197-209.
    18. Volpe Martincus, Christian, 2016. "Out of the Border Labyrinth: An Assessment of Trade Facilitation Initiatives in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 7994, November.
    19. Mamta Kumari & Nalin Bharti, 2021. "Linkages Between Trade Facilitation and Governance: Relevance for Post-COVID-19 Trade Strategy," Millennial Asia, , vol. 12(2), pages 162-189, August.
    20. Kemal Türkcan & Socrates Kraido Majune, 2022. "Logistics infrastructure and export survival in European Union countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 509-535, May.

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    More about this item

    JEL classification:

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

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