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Technical Barriers to Trade and the Performance of Indian Exporters

Author

Listed:
  • Pavel Chakraborty

    (Department of Economics, Management School, Lancaster University)

  • Rahul Singh

    (Economics and Social Sciences Area, Indian Institute of Management, Bangalore)

Abstract

We study the effects of technical barriers to trade (TBTs) imposed by destination markets on prices, marginal costs, and markups of Indian manufacturing exporters. Using detailed firm-product-level data on prices and production from PROWESS, we first identify the underlying component of prices (i.e. marginal costs and markups), and use those as our outcomes of interest in the second stage. We find that (i) introduction of TBTs by importing countries increases marginal costs by 5% and prices by 4%, (ii) there is considerable heterogeneity based on exporters’ initial productivity, (iii) productive exporters (those belonging to the lower deciles) experienced an increase in marginal costs and decrease in markups compared to low productivity exporters, and (iv) overall effects are driven by private firms (both domestic and foreign) belonging to intermediate input industries.

Suggested Citation

  • Pavel Chakraborty & Rahul Singh, 2021. "Technical Barriers to Trade and the Performance of Indian Exporters," Working Papers DP-2021-26, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2021-26
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    technical barriers to trade; prices; marginal costs; markups; exporters;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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