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Impact of Regulatory Burdens on International Trade

Kaoru Nabeshima and Ayako Obashi ()

Journal of the Japanese and International Economies, 2021, vol. 59, issue C

Abstract: In this paper, we develop the additional compliance requirement indicator (ACRI) to quantify the extra regulatory requirements that an exporter may face when serving the foreign country's market. The higher the value of ACRI, the greater the difference between the sets of technical measures in the destination and origin countries. Employing the ACRI, we estimate the impact on trade of regulatory burdens via product-level bilateral gravity equations. We find a significant negative impact of regulatory burdens on bilateral trade for a full sample, but the estimated trade effects vary across sectors and depend on the development levels of the trading countries.

Keywords: Non-tariff measures; technical regulations; compliance requirement; international trade; technical barriers to trade (TBT); sanitary and phytosanitary standard (SPS) (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jjie.2020.101120

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