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The Impact of Technical Barriers to Trade on Home Bias : An application to EU data

Author

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  • Mark VANCAUTEREN

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

The purpose of this paper is trying to estimate the impact of technical barriers to trade on bilateral trade flows of individual EU countries and to evaluate the downward impact of national border on trade flows (home bias). Here we try and identify the effect of technical barriers to trade on EU imports applied to data in which sectors where the EU has sought to introduce harmonized technical regulations to remove technical barriers to trade (New Approach, Old Approach, Mutual Recognition) as well as an aggregate of sectors for which technical barriers are deemed to be unimportant. Using the gravity model, we find that home bias remains substantial for products where the EU has sought to introduce harmonized technical regulations to remove technical barriers to trade but mutual recognition sectors exhibit the smallest home bias. Based upon the analysis on the evolution of home bias in the EU, we find no evidence that the home bias has decreased for products where differences in technical regulations are important.

Suggested Citation

  • Mark VANCAUTEREN, 2002. "The Impact of Technical Barriers to Trade on Home Bias : An application to EU data," LIDAM Discussion Papers IRES 2002032, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2002032
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    References listed on IDEAS

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    1. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    2. Jong-Il Kim & Lawrence J. Lau, 1996. "The sources of Asian Pacific economic growth," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 448-454, April.
    3. Davies, Stephen & Lyons, Bruce, 1996. "Industrial Organization in the European Union: Structure, Strategy, and the Competitive Mechanism," OUP Catalogue, Oxford University Press, number 9780198289739.
    4. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD Publishing.
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    Cited by:

    1. Toshihiro Okubo & Vincent Rebeyrol, 2006. "Home market effect, regulation costs and heterogeneous firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00118871, HAL.

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    Keywords

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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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