Advanced Search
MyIDEAS: Login to save this article or follow this journal

On the measurement of trade costs: direct vs. indirect approaches to quantifying standards and technical regulations

Contents:

Author Info

  • CHEN, NATALIE
  • NOVY, DENNIS

Abstract

In this article, we review the literature on the measurement of trade costs in international trade with a special emphasis on nontariff measures and in particular on standards and technical regulations. We distinguish 'direct' from 'indirect' approaches. The direct approach collects observable data or proxy variables on trade cost components which are then typically used as regressors in a gravity equation of trade. Instead, the indirect approach infers the extent of trade impediments from trade flows. It compares actual trade flows to the trade flows predicted by a hypothetical frictionless benchmark scenario based on a micro-founded trade model, attributing the deviation of actual from predicted trade flows to trade frictions. We argue that economists and policymakers can gain useful insights from both approaches.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://journals.cambridge.org/abstract_S1474745612000183
File Function: link to article abstract page
Download Restriction: no

Bibliographic Info

Article provided by Cambridge University Press in its journal World Trade Review.

Volume (Year): 11 (2012)
Issue (Month): 03 (July)
Pages: 401-414

as in new window
Handle: RePEc:cup:wotrrv:v:11:y:2012:i:03:p:401-414_00

Contact details of provider:
Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Fax: +44 (0)1223 325150
Web page: http://journals.cambridge.org/jid_WTRProvider-Email:journals@cambridge.org

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Anne-Célia Disdier & Lionel Fontagné & Mondher Mimouni, 2008. "The Impact of Regulations on Agricultural Trade: Evidence from the SPS and TBT Agreements," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 336-350.
  2. David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," Econometric Society 2004 North American Summer Meetings 508, Econometric Society.
  3. Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 39(2), pages 265-284, 06.
  4. John Wilson & Tsunehiro Otsuki & Baishali Majumdsar, 2003. "Balancing food safety and risk: do drug residue limits affect international trade in beef?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 377-402.
  5. Chen, Natalie, 2004. "Intra-national versus international trade in the European Union: why do national borders matter?," Journal of International Economics, Elsevier, vol. 63(1), pages 93-118, May.
  6. Dennis Novy, 2011. "Gravity Redux: Measuring International Trade Costs with Panel Data," CESifo Working Paper Series 3616, CESifo Group Munich.
  7. Chen, Maggie Xiaoyang & Mattoo, Aaditya, 2004. "Regionalism in standards - good or bad for trade?," Policy Research Working Paper Series 3458, The World Bank.
  8. Joseph A. Clougherty & Michal Grajek, 2009. "ISO 9000: New form of protectionism or common language in international trade?," ESMT Research Working Papers ESMT-09-006, ESMT European School of Management and Technology.
  9. Xiong, Bo & Beghin, John C., 2010. "Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa?," Staff General Research Papers 31595, Iowa State University, Department of Economics.
  10. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  11. Knut Blind & Andre Jungmittag, 2005. "Trade and the impact of innovations and standards: the case of Germany and the UK," Applied Economics, Taylor & Francis Journals, vol. 37(12), pages 1385-1398.
  12. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
  13. Temple, Paul & Urga, Giovanni, 1997. "The Competitiveness of UK Manufacturing: Evidence from Imports," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 207-27, April.
  14. Wilson, John S. & Otsuki, Tsunehiro, 2004. "To spray or not to spray: pesticides, banana exports, and food safety," Food Policy, Elsevier, vol. 29(2), pages 131-146, April.
  15. Essaji, Azim, 2008. "Technical regulations and specialization in international trade," Journal of International Economics, Elsevier, vol. 76(2), pages 166-176, December.
  16. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  17. Bruno Henry de Frahan & Mark Vancauteren, 2006. "Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(3), pages 337-360, September.
  18. Richard Baldwin & Daria Taglioni, 2011. "Gravity Chains: Estimating Bilateral Trade Flows When Parts And Components Trade Is Important," NBER Working Papers 16672, National Bureau of Economic Research, Inc.
  19. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
  20. Otsuki, Tsunehiro & Wilson, John S. & Sewadeh, Mirvat, 2001. "Saving two in a billion: : quantifying the trade effect of European food safety standards on African exports," Food Policy, Elsevier, vol. 26(5), pages 495-514, October.
  21. Maskus, Keith E. & Otsuki, Tsunehiro & Wilson, John S., 2005. "The cost of compliance with product standards for firms in developing countries: an econometric study," Policy Research Working Paper Series 3590, The World Bank.
  22. Jane Korinek & Mark Melatos & Marie-Luise Rau, 2008. "A Review of Methods for Quantifying the Trade Effects of Standards in the Agri-Food Sector," OECD Trade Policy Papers 79, OECD Publishing.
  23. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September.
  24. Witold Czubala & Ben Shepherd & John S. Wilson, 2009. "Help or Hindrance? The Impact of Harmonised Standards on African Exports †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 711-744, November.
  25. Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
  26. Czubala, Witold & Shepherd, Ben & Wilson, John S., 2007. "Help or hindrance ? the impact of harmonized standards on african exports," Policy Research Working Paper Series 4400, The World Bank.
  27. Ana Cecília Fieler, 2011. "Nonhomotheticity and Bilateral Trade: Evidence and a Quantitative Explanation," Econometrica, Econometric Society, vol. 79(4), pages 1069-1101, 07.
  28. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
  29. Chen, Natalie & Novy, Dennis, 2011. "Gravity, trade integration, and heterogeneity across industries," Journal of International Economics, Elsevier, vol. 85(2), pages 206-221.
  30. Portugal-Perez, Alberto & Reyes, Jose-Daniel & Wilson, John S., 2009. "Beyond the information technology agreement : harmonization of standards and trade in electronics," Policy Research Working Paper Series 4916, The World Bank.
  31. Robert Shimer, 2009. "Convergence in Macroeconomics: The Labor Wedge," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 280-97, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Borchert, Ingo & Gootiiz, Batshur & Mattoo, Aaditya, 2012. "Policy barriers to international trade in services : evidence from a new database," Policy Research Working Paper Series 6109, The World Bank.
  2. Arman Mazhikeyev & T.Huw Edwards & Marian Rizov, 2014. "Openness and Isolation: the comparative trade performance of the Former Soviet Central Asian countries," Discussion Paper Series 2014_02, Department of Economics, Loughborough University, revised Feb 2014.
  3. Arman Mazhikeyev & T.Huw Edwards, 2013. "Central Asian Trade Relations in the Post-Soviet Era," Discussion Paper Series 2013_02, Department of Economics, Loughborough University, revised Jun 2013.
  4. Stefano Bolatto, . "Trade across Countries and Manufacturing Sectors with Heterogeneous Trade Elasticities," Development Working Papers 360, Centro Studi Luca d\'Agliano, University of Milano.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cup:wotrrv:v:11:y:2012:i:03:p:401-414_00. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.