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Sorting It Out: Technical Barriers to Trade and Industry Productivity

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  • Gabriel J. Felbermayr
  • Benjamin Jung

Abstract

Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with heterogeneous firms, trade in differentiated goods, and variable external economies of scale to sort out the rich interactions between TBT reform, input diversity, firm-level productivity, and aggregate productivity. We calibrate the model for 14 industries in order to clarify the theoretical ambiguities. Overall, our results tend to suggest beneficial effects of TBT reform but also reveal interesting sectoral variation.

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Paper provided by FIW in its series FIW Working Paper series with number 014.

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Length: 51
Date of creation: Feb 2008
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Handle: RePEc:wsr:wpaper:y:2008:i:014

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Keywords: Heterogenous Firms; Single European Market; International Trade; Technical Barriers to Trade; Regulatory Costs;

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Citations

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Cited by:
  1. Felbermayr, Gabriel & Jung, Benjamin, 2011. "Sorting It Out: Technical Barriers to Trade and Industry Productivity," Munich Reprints in Economics, University of Munich, Department of Economics 20575, University of Munich, Department of Economics.
  2. Gabriel J. Felbermayr & Benjamin Jung & Mario Larch, 2011. "Optimal Tariffs, Retaliation and the Welfare Loss from Tariff Wars in the Melitz Model," CESifo Working Paper Series 3474, CESifo Group Munich.
  3. 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), Centre for the Study of African Economies (CSAE), vol. 18(5), pages 711-744, November.
  4. Felbermayr, Gabriel & Jung, Benjamin & Larch, Mario, 2012. "Tariffs and welfare in new trade theory models," University of Tuebingen Working Papers in Economics and Finance 41, University of Tuebingen, Faculty of Economics and Social Sciences.
  5. Benjamin Jung, 2012. "Optimal fixed cost subsidies in Melitz-type models," Empirica, Springer, Springer, vol. 39(1), pages 87-108, February.

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