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The Effect of Trade Facilitation on Sectoral Trade

Listed author(s):
  • Inmaculada Martínez-Zarzoso

    ()

    (Ibero-Amerika Institut für Wirtschaftsfoschung, Georg-August Universität Göttingen / Germany)

  • Laura Márquez-Ramos

    (Instituto de Economía Internacional, Castellón / Spain)

This paper aims to analyse the effect of trade facilitation on sectoral trade flows. We use data from the World Bank’s Doing Business Database on the fees associated with completing the procedures to export or import goods in a country, on the number of documents needed and on the required time to complete all the administrative procedures to import and export. An augmented gravity equation is estimated for 13 exporters and 167 importers using a number of estimation techniques, namely OLS, PPML and the Harvey model. A common result is that trade flows increase by lowering transport costs and the number of days required to trade. The outcome supports multilateral initiatives, as that in the WTO, which encourages countries to assess their trade facilitation needs and priorities and to improve them. The measures adopted will not only benefit the country that improves trade facilitation, but also its trading partners.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB167.pdf
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Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 167.

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Length: 42 pages
Date of creation: 06 Dec 2007
Handle: RePEc:got:iaidps:167
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  1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
  2. Inmaculada Martínez-Zarzoso & Laura Márquez-Ramos, 2005. "Does Technology Foster Trade? Empirical Evidence for Developed and Developing Countries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(1), pages 55-69, March.
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  17. repec:wbk:wbpubs:12425 is not listed on IDEAS
  18. Dennis, Allen, 2006. "The impact of regional trade agreements and trade facilitation in the Middle East and North Africa region," Policy Research Working Paper Series 3837, The World Bank.
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