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Trade Policy, Trade Costs, and Developing Country Trade

  • Hoekman, Bernard
  • Nicita, Alessandro

This paper reviews some indices of trade restrictiveness and trade facilitation and compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs. Based on a gravity regression framework, the analysis suggests that tariffs and non-tariff measures continue to be a significant source of trade restrictiveness for low-income countries despite preferential access programs. The results also suggest that behind-the-border measures to improve logistics performance and facilitate trade are likely to have a comparable, if not larger, effect in expanding developing country trade, especially exports.

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File URL: http://www.sciencedirect.com/science/article/pii/S0305750X11001434
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Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 12 ()
Pages: 2069-2079

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:12:p:2069-2079
DOI: 10.1016/j.worlddev.2011.05.013
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. James E. Anderson & Douglas Marcouiller, S.J., 1999. "Insecurity and the Pattern of Trade: An Empirical Investigation," Boston College Working Papers in Economics 418, Boston College Department of Economics, revised 03 Aug 2000.
  2. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
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  9. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
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  16. Lawless, Martina, 2008. "Deconstructing Gravity: Trade Costs and Extensive and Intensive Margins," Research Technical Papers 5/RT/08, Central Bank of Ireland.
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