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Heterogeneous effects of nontariff measures on cross‐border investments: Bilateral firm‐level analysis

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  • Amat Adarov
  • Mahdi Ghodsi

Abstract

We analyze the heterogeneous effects of technical regulations and safety standards embodied in nontariff measures on foreign direct investment using global firm‐level panel data of bilateral cross‐border ownership relationships over the period 2008–2018. We develop a novel measure of time‐varying bilateral ad valorem equivalents of sectoral nontariff measures, which reveals that technical barriers to trade (TBTs) played a much greater role as a trade‐inhibiting factor in comparison with import tariffs and sanitary and phytosanitary (SPS) measures over the period 1996–2018. Estimations using the Poisson pseudo‐maximum likelihood framework reveal the importance of nontariff measures as a driver of foreign direct investment.

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  • Amat Adarov & Mahdi Ghodsi, 2023. "Heterogeneous effects of nontariff measures on cross‐border investments: Bilateral firm‐level analysis," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 158-179, February.
    • Handle: RePEc:bla:reviec:v:31:y:2023:i:1:p:158-179
    DOI: 10.1111/roie.12621
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    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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