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Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation

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  • Mr. Qing Wang

Abstract

A comprehensive empirical investigation is carried out to ascertain the import-reducing effect of trade protection barriers. We first present a statistical summary of the status of global trade protection. Then, based on a monopolistic competition trade model and 1994 cross-country data on trade barriers, trade flows, and production, we estimate the import-reducing effect of trade barriers including both tariffs and non-tariff barriers (NTBs). We use the disaggregated cross-country, cross-industry data on manufactured goods and, unlike previous studies, our sample covers a broad range of countries-more than 70 in total-including countries from the most developed ones like those in the Group of Seven to the least developed one, Bangladesh. We specify an empirical model that captures the stylized facts well and helps generate sensible estimates. Our econometric framework is designed to control for the simultaneous determination of trade flows, trade barriers, and production. We find that both tariff and NTBs are quite significant in restricting imports.

Suggested Citation

  • Mr. Qing Wang, 2001. "Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation," IMF Working Papers 2001/216, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2001/216
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    Cited by:

    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. Mendez Lopez, Ana & Loopstra, Rachel & McKee, Martin & Stuckler, David, 2017. "Is trade liberalisation a vector for the spread of sugar-sweetened beverages? A cross-national longitudinal analysis of 44 low- and middle-income countries," Social Science & Medicine, Elsevier, vol. 172(C), pages 21-27.
    3. Mr. Andrew Berg & Anne O. Krueger, 2003. "Trade, Growth, and Poverty: A Selective Survey," IMF Working Papers 2003/030, International Monetary Fund.
    4. Funke, Michael & Ruhwedel, Ralf, 2003. "Trade, product variety and welfare: a quantitative assessment for the transition economies in Central and Eastern Europe," BOFIT Discussion Papers 17/2003, Bank of Finland Institute for Emerging Economies (BOFIT).
    5. Funke, Michael & Ruhwedel, Ralf, 2003. "Trade, product variety and welfare: a quantitative assessment for the transition economies in Central and Eastern Europe," BOFIT Discussion Papers 17/2003, Bank of Finland Institute for Emerging Economies (BOFIT).
    6. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
    7. repec:zbw:bofitp:2003_017 is not listed on IDEAS
    8. Georg Koopmann, 2002. "Transatlantic trade under fire," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 37(3), pages 127-131, May.

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