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Assessing Barriers to Trade in the Distribution and Telecom Sectors in Emerging Countries

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  • Lionel Fontagné
  • Cristina Mitaritonna

Abstract

We compute ad valorem equivalents (AVEs) for the regulation in three service sectors (i.e. fixed telecom, mobile telecom, distribution) applied by selected emerging countries. We start with qualitative information on the restrictions applied by each country in each sector on the basis of which we apply a multivariate statistical approach, to transform this qualitative data into a trade restrictiveness synthetic index (STRI). In a second stage we estimate the average impact of STRI on price cost margins, using a method avoiding the usual two-stage estimation. In the third stage, this impact is used to calculate the AVE of the STRI estimated in the first step. It is shown that the STRI has a significant effect on the price-cost margins of the individual firms only when controlled for Regional trade Agreements and exception to the MFN clause in the considered sector. Lastly, we compute tariff equivalents for the STRIs previously calculated using the estimated impact. More than half our AVEs are larger than 50% and one AVE out of six is above 100%.

Suggested Citation

  • Lionel Fontagné & Cristina Mitaritonna, 2009. "Assessing Barriers to Trade in the Distribution and Telecom Sectors in Emerging Countries," Working Papers 2009-37, CEPII research center.
  • Handle: RePEc:cii:cepidt:2009-37
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    References listed on IDEAS

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    1. Henk Kox & Hildegunn Kyvik Nordås, 2007. "Services Trade and Domestic Regulation," OECD Trade Policy Papers 49, OECD Publishing.
    2. Khalilzadeh-Shirazi, Javad, 1974. "Market Structure and Price-Cost Margins in United Kingdom Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 67-76, February.
    3. Mohamed Ali Marouani & Laura Munro, 2009. "Assessing Barriers to Trade in Services in the MENA Region," OECD Trade Policy Papers 84, OECD Publishing.
    4. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, pages 267-274.
    5. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, pages 133-138.
    6. Mohamed Ali Marouani & Laura Munro, 2009. "Assessing Barriers to Trade in Services in the MENA Region," OECD Trade Policy Papers 84, OECD Publishing.
    7. Nora Dihel & Ben Shepherd, 2007. "Modal Estimates of Services Barriers," OECD Trade Policy Papers 51, OECD Publishing.
    8. Stephen S. Golub, 2009. "Openness to Foreign Direct Investment in Services: An International Comparative Analysis," The World Economy, Wiley Blackwell, vol. 32(8), pages 1245-1268, August.
    9. Novella Bottini & Mohamed Ali Marouani & Laura Munro, 2011. "Service Sector Restrictiveness and Economic Performance: An Estimation for the MENA Region," The World Economy, Wiley Blackwell, vol. 34(9), pages 1652-1678, September.
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    Cited by:

    1. Olivier Cadot & Ernawati Munadi & Lili Yan Ing, 2015. "Streamlining Non-Tariff Measures in ASEAN: The Way Forward," Asian Economic Papers, MIT Press, vol. 14(1), pages 35-70, Winter/Sp.
    2. Lionel Fontagné & Cristina Mitaritonna & José Signoret, 2016. "Estimated Tariff Equivalents of Services NTMs," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01476543, HAL.
    3. Julien Gooris & Cristina Mitaritonna, 2015. "Which import restrictions matter for trade in services ?," Working Papers 2015-33, CEPII research center.
    4. Olivier CADOT & Ernawati MUNADI & Lili Yan ING, 2013. "Streamlining NTMs in ASEAN: The Way Forward," Working Papers DP-2013-24, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Crozet, Matthieu & Milet, Emmanuel & Mirza, Daniel, 2016. "The impact of domestic regulations on international trade in services: Evidence from firm-level data," Journal of Comparative Economics, Elsevier, pages 585-607.
    6. Decreux, Yvan & Milner, Chris, 2010. "Some New Insights into the Effects of the EU-South Korea Free Trade Area: The Role of Non Tariff Barriers," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 783-817.
    7. Lionel Fontagné & Amélie Guillin & Cristina Mitaritonna, 2011. "Estimations of Tariff Equivalents for the Services Sectors," Working Papers 2011-24, CEPII research center.
    8. Riham Ahmed Ezzat & Nora Aboushady, 2015. "Do Telecom Restrictive Policies Matter for Telecom Performance? Evidence from MENA Countries," Working Papers 949, Economic Research Forum, revised Sep 2015.

    More about this item

    Keywords

    SERVICES; AD VALOREM EQUIVALENTS;

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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