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Do SPS measures matter for margins of trade? Evidence from firm-level data

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  • Hoda El-Enbaby
  • Rana Hendy
  • Chahir Zaki

Abstract

According to the World Trade Organization (WTO) standards, countries are allowed to adapt regulations under the Sanitary and phyto-sanitary (SPS) and technical barriers to trade (TBT) agreements in order to protect human, animal and plant health, as well as environment and human safety. Yet, these measures can become an impediment in international trade, especially for developing countries. Therefore, using an Egyptian firm-level data set and a new database on specific trade concerns raised in the TBT and SPS committees at the WTO, we analyse the effects of product standards on two related aspects: first, the probability to export (firm-product extensive margin), and second, the value exported (firm-product intensive margin). We merge this data set with a new database on specific trade concerns raised in the TBT and SPS committees at the WTO. Our main findings show that SPS measures imposed on Egyptian exporters have a negative impact on the probability of exporting a new product to a new destination. By contrast, the intensive margin of exports is not significantly affected by such measures.

Suggested Citation

  • Hoda El-Enbaby & Rana Hendy & Chahir Zaki, 2016. "Do SPS measures matter for margins of trade? Evidence from firm-level data," Applied Economics, Taylor & Francis Journals, vol. 48(21), pages 1949-1964, May.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:21:p:1949-1964
    DOI: 10.1080/00036846.2015.1111987
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    References listed on IDEAS

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    1. Wilson, John & Otsuki, Tsunehiro, 2003. "Balancing risk reduction and benefits from trade in setting standards," 2020 vision briefs 10 No. 6, International Food Policy Research Institute (IFPRI).
    2. Guimaraes, Paulo & Portugal, Pedro, 2009. "A Simple Feasible Alternative Procedure to Estimate Models with High-Dimensional Fixed Effects," IZA Discussion Papers 3935, Institute of Labor Economics (IZA).
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    3. Jacob Wood & Jie Wu & Yilin Li & Haejin Jang, 2017. "The Economic Impact of SPS Measures on Agricultural Exports to China: An Empirical Analysis Using the PPML Method," Social Sciences, MDPI, vol. 6(2), pages 1-18, May.
    4. Mahdi Ghodsi, 2020. "The impact of Chinese technical barriers to trade on its manufacturing imports when exporters are heterogeneous," Empirical Economics, Springer, vol. 59(4), pages 1667-1698, October.
    5. Shaosheng Jin & Baojie Ma & Yuqing Zheng & Xin Jin & Wenchao Wu, 2024. "Short‐term impact of food safety standards on agri‐product exports: Evidence from Japan's positive list system on Chinese vegetable exports," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 362-381, February.
    6. Ayhab Saad, 2018. "The exceptional performance of exporters: Evidence from Egyptian ?rms," Working Papers 1208, Economic Research Forum, revised 12 Jun 2018.
    7. Upalat Korwatanasakul & Youngmin Baek, 2021. "The Effect of Non-Tariff Measures on Global Value Chain Participation," Global Economic Review, Taylor & Francis Journals, vol. 50(3), pages 193-212, July.
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