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Technical regulations, intermediate inputs, and performance of firms: Evidence from India

Rahul Singh and Rupa Chanda

Journal of International Economics, 2021, vol. 128, issue C

Abstract: We estimate the consequences of maintaining restrictive Technical Barriers to Trade (TBT) measures on markups for manufacturing firms in India. We combine firm-product level data from Prowess with the data on TBTs that have been raised as a concern by member countries against India in the TBT committee of WTO. We find that higher TBT incidence on intermediate inputs to the industry leads to a decrease in markups for importers relative to non-importers. Firms absorb the increase in marginal costs by reducing markups with no significant increase in prices.

Keywords: NTMs; TBTs; Intermediate inputs; Markup; Marginal cost (search for similar items in EconPapers)
JEL-codes: F13 F14 O19 O24 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jinteco.2020.103412

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