Tariff Evasion, the Trade Gap, and Structural Trade

Ronald B. Davies and Zuzanna Studnicka

No 202228, Working Papers from School of Economics, University College Dublin

Abstract: While it is well-recognized that there are differences in the trade values reported by exporters and importers, a literature has emerged linking this trade gap to tariff evasion. These efforts, however, lack a structural theoretic underpinning and limit their product-level investigations to a small number of countries. Our first contribution is to provide a structural model of endogenous tariff evasion, one which then highlights the importance of both tariffs and border enforcement. Our second contribution is to use a global, product-level dataset from 2002-2019, the analysis of which is consistent with our model’s predictions.

Keywords: Tariff Evasion; Structural Gravity; Trade Gap; Border Controls (search for similar items in EconPapers)
JEL-codes: F13 F14 H26 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2022-12
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