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Sorting It Out: Technical Barriers to Trade and Industry Productivity

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  • Gabriel J. Felbermayr
  • Benjamin Jung

Abstract

Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with heterogeneous firms, trade in differentiated goods, and variable external economies of scale to sort out the rich interactions between TBT reform, input diversity, firm-level productivity, and aggregate productivity. We calibrate the model for 14 industries in order to clarify the theoretical ambiguities. Overall, our results tend to suggest beneficial effects of TBT reform but also reveal interesting sectoral variation.

Suggested Citation

  • Gabriel J. Felbermayr & Benjamin Jung, 2008. "Sorting It Out: Technical Barriers to Trade and Industry Productivity," FIW Working Paper series 014, FIW.
  • Handle: RePEc:wsr:wpaper:y:2008:i:014
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    Citations

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    Cited by:

    1. Felbermayr, Gabriel & Jung, Benjamin & Larch, Mario, 2012. "Tariffs and welfare in new trade theory models," University of Tuebingen Working Papers in Economics and Finance 41, University of Tuebingen, Faculty of Economics and Social Sciences.
    2. Witold Czubala & Ben Shepherd & John S. Wilson, 2009. "Help or Hindrance? The Impact of Harmonised Standards on African Exports †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 711-744, November.
    3. Gabriel Felbermayr & Benjamin Jung, 2011. "Sorting It Out: Technical Barriers to Trade and Industry Productivity," Open Economies Review, Springer, pages 93-117.
    4. Ehsan U. Choudhri & Antonio Marasco, 2017. "Is Foreign Technological Advance Harmful in the Melitz Model?," Open Economies Review, Springer, pages 149-166.
    5. Benjamin Jung, 2012. "Optimal fixed cost subsidies in Melitz-type models," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, pages 87-108.
    6. Jørgensen, Jan Guldager & Schröder, Philipp J.H., 2014. "Harmonization versus Mutual Recognition: Some pitfalls for the coordination of product standards under imperfect competition," Discussion Papers of Business and Economics 23/2014, University of Southern Denmark, Department of Business and Economics.
    7. Felbermayr, Gabriel & Jung, Benjamin & Larch, Mario, 2013. "Optimal tariffs, retaliation, and the welfare loss from tariff wars in the Melitz model," Journal of International Economics, Elsevier, pages 13-25.
    8. Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, pages 711-729.
    9. Shepherd, Ben, 2015. "Product Standards and Export Diversification," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 30(2), pages 300-333.

    More about this item

    Keywords

    Heterogenous Firms; Single European Market; International Trade; Technical Barriers to Trade; Regulatory Costs;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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