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Non-Tariff Measures, Import Competition, and Exports

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  • Cali,Massimiliano
  • Montfaucon,Angella Faith Lapukeni

Abstract

The empirical evidence on the impact of import competition on economic performance relies mainlyon import tariff liberalization as the source of changes to competition. This paper extends this evidence by focusing onnon-tariff measures, an increasingly important trade policy tool globally. The analysis examines the competition effectof four specific non-tariff measures on the exporting activity of the universe of Indonesian firms. The focus ison measures that do not clearly address any negative externalities of imports—the supposed objective ofnon-tariff measures—and hence appear to be protectionist in nature. The results suggest that by restricting importcompetition, these measures reduce the survival of firms in export markets as well as the intensive and extensivemargins of their exports. Non-tariff measures have a more negative effect than import tariffs in most cases and theseresults are robust to various checks. The analysis provides suggestive evidence that markups are an important channelthrough which these effects are mediated.

Suggested Citation

  • Cali,Massimiliano & Montfaucon,Angella Faith Lapukeni, 2021. "Non-Tariff Measures, Import Competition, and Exports," Policy Research Working Paper Series 9801, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9801
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    References listed on IDEAS

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    Cited by:

    1. Cali,Massimiliano & Ghose,Devaki & Montfaucon,Angella Faith Lapukeni & Ruta,Michele, 2022. "Trade Policy and Exporters’ Resilience : Evidence from Indonesia," Policy Research Working Paper Series 10068, The World Bank.
    2. Willem THORBECKE & KATO Atsuyuki, 2022. "Indonesia and Vietnam in Global Supply Chains and the Age of COVID: A Tale of Two Countries," Discussion papers 22010, Research Institute of Economy, Trade and Industry (RIETI).

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