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The Effect of Trade Facilitation on Sectoral Trade

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  • Martinez-Zarzoso Inma

    (Georg-August Universitaet Goettingen and Universidad Jaume I)

  • Márquez-Ramos Laura

    (Universidad Jaume I)

Abstract

This paper aims to analyse the effect of trade facilitation on sectoral trade flows. We use data from the World Bank's Doing Business Database on the fees associated with completing the procedures to export or import goods in a country, on the number of documents needed and on the required time to complete all the administrative procedures to import and export. An augmented gravity equation is estimated for 13 exporters and 167 importers using a number of estimation techniques, namely OLS, PPML and the Harvey model. A common result is that trade flows increase by lowering transport costs and the number of days required to trade. The outcome supports multilateral initiatives, as that in the WTO, which encourages countries to assess their trade facilitation needs and priorities and to improve them. The measures adopted will not only benefit the country that improves trade facilitation, but also it's trading partners.

Suggested Citation

  • Martinez-Zarzoso Inma & Márquez-Ramos Laura, 2008. "The Effect of Trade Facilitation on Sectoral Trade," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-46, September.
    • Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:42
    DOI: 10.2202/1935-1682.1927
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    3. Liu, Lan & Yue, Chengyan, 2013. "Investigating the impacts of time delays on trade," Food Policy, Elsevier, vol. 39(C), pages 108-114.
    4. Piseth, Sok & Monyoudom, Yang & Tynarath, Houn, 2021. "Cambodia’s Agri-Food Trade: Structure, New Emerging Potentials, Challenges & Impacts of Covid-19," PRCI Research Papers 321061, Michigan State University, Department of Agricultural, Food and Resource Economics, Food Security Group.
    5. Bernard Hoekman, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," RSCAS Working Papers 2014/102, European University Institute.
    6. Bernard Hoekman & Ben Shepherd, 2013. "Who Profits From Trade Facilitation Initiatives?," RSCAS Working Papers 2013/49, European University Institute.
    7. Brooks, Douglas H. & Stone, Susan F., 2010. "Accelerating Regional Integration: Issues at the Border," ADBI Working Papers 200, Asian Development Bank Institute.
    8. Persson, Maria & Bourdet, Yves, 2010. "Completing the EU Customs Union. The Effects of Trade Procedure Harmonization," Working Paper Series 848, Research Institute of Industrial Economics.
    9. Khorana, Sangeeta & Caram, Santiago & Biagetti, Marco, 2021. "Developmental relevance of Everything but Arms: Implications for Bangladesh after LDC graduation," MPRA Paper 116258, University Library of Munich, Germany.
    10. Pernia, Ernesto, 2012. "Infrastructure and Inclusive Growth," MPRA Paper 104910, University Library of Munich, Germany.
    11. Bourdet, Yves & Persson, Maria, 2011. "Reaping the Benefits of Deeper Euro-Med Integration Through Trade Facilitation," Working Paper Series 881, Research Institute of Industrial Economics.
    12. Ying Yi Tsai, 2010. "Strategic Choice of Freight Mode and Investments in Transport Infrastructure within Production Networks," Working Papers id:3083, eSocialSciences.
    13. Ferrantino, Michael J., 2012. "Using supply chain analysis to examine the costs of non-tariff measures (NTMs) and the benefits of trade facilitation," WTO Staff Working Papers ERSD-2012-02, World Trade Organization (WTO), Economic Research and Statistics Division.
    14. Imad Kareem Alaamshani & Hanny Zurina Hamzah & Shivee Ranjanee Kaliappan & Normaz Wana Ismail, 2021. "Impact of Trade Facilitation on Extensive Margin," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 131-147.
    15. Boniface Ngah Epo & Ronie Bertrand Nguenkwe, 2020. "Information and Communication Technology and Intra-Regional Trade in the Economic Community of West African States: Ambivalent or Complementary?," Economics Bulletin, AccessEcon, vol. 40(2), pages 1397-1412.
    16. Beverelli, Cosimo & Neumueller, Simon & Teh, Robert, 2015. "Export Diversification Effects of the WTO Trade Facilitation Agreement," World Development, Elsevier, vol. 76(C), pages 293-310.
    17. Christodoulopoulou, Styliani, 2010. "THE Effects of Multilateral Trade Liberalization on the Extensive and the Intensive Margins of Trade," MPRA Paper 29169, University Library of Munich, Germany.
    18. Bensassi, Sami & Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2015. "Relationship between logistics infrastructure and trade: Evidence from Spanish regional exports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 72(C), pages 47-61.
    19. Nguyen, Cuong, 2013. "Poverty, Inequality and Trade Facilitation in Low and Middle Income Countries," MPRA Paper 50312, University Library of Munich, Germany.
    20. Bernard Hoekman, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," RSCAS Working Papers 2014/102, European University Institute.
    21. Persson, Maria, 2008. "Trade Facilitation and the Extensive and Intensive Margins of Trade," Working Papers 2008:13, Lund University, Department of Economics.
    22. Beverelli, Cosimo & Neumüller, Simon & Teh, Robert, 2014. "A new look at the extensive trade margin effects of trade facilitation," WTO Staff Working Papers ERSD-2014-16, World Trade Organization (WTO), Economic Research and Statistics Division.
    23. Ndubuisi, Gideon & Avenyo, Elvis, 2018. "Estimating the effects of robotization on exports," MERIT Working Papers 2018-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    • F10 - International Economics - - Trade - - - General

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