Nontariff Barriers as Bridge to Cross
This research assesses the effects of sanitary and phytosanitary (SPS) standards in international trade by introducing a new concept, bridge to cross (BTC), with product standards. The BTC in this paper is the regulatory gap between the exporting and importing countries with regard to any particular SPS measure. Assuming that each country’s standard is binding in its own domestic markets, the standard of the importing country emerges as an effective trade barrier only when it exceeds the standard in the domestic market of the exporting country. Given the need to account for unobserved heterogeneity (multilateral resistance) in empirical trade models; in reduced form gravity models, the effect of regulation cannot be identified as it varies at the level of importing country over time. This happens because correct accounting for multilateral resistance mandates exporter x time and importer x time fixed effects. However, the effect of BTC can still be identified because it varies over time by the pair of countries involved in trade. As an application we apply the method to an SPS regulation relating to aflatoxin contamination in maize. In our empirical analysis we find that the effect of BTC is higher for poorer countries. The results have a significantly different policy implication for market access of poor countries. Not only weaker standards in the importing country but tighter standards in domestic markets of exporters could have a significant positive effect on exports.
|Date of creation:||2013|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
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.:
- Joseph A Clougherty & Michał Grajek, 2008.
"The impact of ISO 9000 diffusion on trade and FDI: A new institutional analysis,"
Journal of International Business Studies,
Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 613-633, June.
- Clougherty, Joseph A. & Grajek, Michal, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 179, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Joseph A. Clougherty & Michal Grajek, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," CIG Working Papers SP II 2006-22, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Clougherty, Joseph A. & Grajek, Michal, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," CEPR Discussion Papers 6026, C.E.P.R. Discussion Papers.
- Maxim, Belenkiy, 2008. "Robustness of the Extensive Margin in the Helpman, Melitz and Rubinstein (HMR) Model," MPRA Paper 17913, University Library of Munich, Germany, revised Feb 2009.
- Timothy E. Josling & Donna Roberts & David Orden, 2004. "Food Regulation and Trade: Toward a Safe and Open Global System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 347, November.
- Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
- Paul M. Romer, 1993. "New Goods, Old Theory, and the Welfare Costs of Trade Restrictions," NBER Working Papers 4452, National Bureau of Economic Research, Inc.
- Jarko Fidrmuc, 2009. "Gravity models in integrated panels," Empirical Economics, Springer, vol. 37(2), pages 435-446, October.
- Dennis Novy, 2010. "Trade Costs and the Open Macroeconomy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 514-545, 09.
- Novy, Dennis, 2006. "Trade Costs and the Open Macroeconomy," The Warwick Economics Research Paper Series (TWERPS) 778, University of Warwick, Department of Economics.
- Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
- Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
- Rubinstein, Yona & Helpman, Elhanan & Melitz, Marc, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," Scholarly Articles 3228230, Harvard University Department of Economics.
- 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.
- Richard Pomfret & Patricia Sourdin, 2010. "Trade Facilitation And The Measurement Of Trade Costs," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 145-163.
- Toke S. Aidt & Martin Gassebner, 2010. "Do Autocratic States Trade Less?," World Bank Economic Review, World Bank Group, vol. 24(1), pages 38-76, January.
- Aidt, T.S. & Gassebner, M., 2007. "Do Autocratic States Trade Less?," Cambridge Working Papers in Economics 0742, Faculty of Economics, University of Cambridge.
- Toke S. Aidt & Martin Gassebner, 2007. "Do Autocratic States Trade Less?," KOF Working papers 07-175, KOF Swiss Economic Institute, ETH Zurich.
- Gordon Wilmsmeier & Inmaculada MartÃnez-Zarzoso, 2009. "Determinants of maritime transport costs -- a panel data analysis for Latin American trade," Transportation Planning and Technology, Taylor & Francis Journals, vol. 33(1), pages 105-121, October.
- Inmaculada Martínez-Zarzoso & Gordon Wilmsmeier, 2008. "Determinants of Maritime Transport Costs. A Panel Data Analysis for Latin American Trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 172, Ibero-America Institute for Economic Research.
- Shepherd, Ben, 2007. "Product standards, harmonization, and trade : evidence from the extensive margin," Policy Research Working Paper Series 4390, The World Bank.
- Kathy Baylis & Lia Nogueira & Kathryn Pace, 2010. "Food Import Refusals: Evidence from the European Union," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 566-572.
- 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. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:aaea13:149680. 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: (AgEcon Search)
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.