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Making (Small) Firms Happy. The Heterogeneous Effect of Trade Facilitation Measures

Author

Listed:
  • Lionel Gérard Fontagné
  • Gianluca Orefice
  • Roberta Piermartini

Abstract

This paper considers the asymmetric effect of Trade Facilitation Agreement (TFA) policies on heterogeneous exporters, based on matching a detailed panel of French firm exports to a new database of Trade Facilitation Indicators (TFIs) released recently by the Organisation for Economic Cooperation and Development (OECD). We analyze the effect of these TFIs on three trade-related outcomes: (i) exported value (firm intensive margin), (ii) number of products exported (product extensive margin) and (iii) average export value per product exported (product intensive margin). We find strong evidence of a heterogeneous effect of trade facilitation across firm size. While better information availability, advance ruling and appeal procedures mainly benefit small firms, the simplification of documents and automation tend to favor large firms’ trade. This is coherent with the idea that while some elements of the TFA simply reduce the fixed cost of exporting (favoring small firms in particular), other chapters in the TFA reduce the scope for corruption at borders, making large firms less reluctant to serve corrupt countries.

Suggested Citation

  • Lionel Gérard Fontagné & Gianluca Orefice & Roberta Piermartini, 2016. "Making (Small) Firms Happy. The Heterogeneous Effect of Trade Facilitation Measures," CESifo Working Paper Series 5899, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5899
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Debashis CHAKRABORTY & Sacchidananda MUKHERJEE, 2016. "How Trade Facilitation Measures influence Export Orientation? Empirical Estimates with Logistics Performance Index Data," Journal of Economics Library, KSP Journals, vol. 3(4), pages 554-569, December.
    2. Christian Volpe Martincus, 2016. "Out of the Border Labyrinth: An Assessment of Trade Facilitation Initiatives in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 96856, February.
    3. Aggarwal, Sakshi & Chakraborty, Debashis, 2017. "Determinants of India’s Bilateral Intra-Industry Trade over 2001-15: Empirical Results," MPRA Paper 78020, University Library of Munich, Germany.
    4. Fugazza, Marco & Olarreaga, Marcelo & Ugarte, Cristian, 2018. "On the heterogeneous effects of market access barriers: evidence from small and large Peruvian exporters," CEPR Discussion Papers 12876, C.E.P.R. Discussion Papers.
    5. repec:elg:eechap:17028_14 is not listed on IDEAS
    6. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2017. "Transportation and Trade Interactions: A Trade Facilitation Perspective," IDB Publications (Working Papers) 97957, Inter-American Development Bank.
    7. repec:idb:idbbks:7994 is not listed on IDEAS
    8. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2018. "Transportation and trade interactions: a trade facilitation perspective," Chapters,in: Handbook of International Trade and Transportation, chapter 14, pages 422-450 Edward Elgar Publishing.

    More about this item

    Keywords

    trade facilitation; heterogeneous firms; extensive margin; intensive margin;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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