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A Gravity Model of Barriers to Trade in New Zealand

  • Murat Genç
  • David Law

    ()

    (The Treasury)

There are many costs associated with international trade. These costs act as barriers to trade and affect the level of trade. This paper first provides a brief discussion of the state-of- the-art methods used to measure trade costs and to quantify their impact on trade. It then empirically investigates the role of a range of barriers to New Zealand’s trade within the framework of a gravity model of trade. The analysis covers New Zealand’s trade with around 200 trade partners over the years 2001 to 2006, and includes tariffs and a number of non-trade policy factors such as property rights, financial market sophistication, corruption, and a range of measures related to infrastructure quality. The empirical evidence both in the literature and in this study highlights the growing importance of nonpolicy induced barriers to trade.

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File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2014/14-05/twp14-05.pdf
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Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 14/05.

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Length: 55
Date of creation: Feb 2014
Date of revision:
Handle: RePEc:nzt:nztwps:14/05
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