Do Technical Barriers to Trade Promote or Restrict Trade? Evidence from China

Xiaohua Bao and Larry Qiu

Asia-Pacific Journal of Accounting & Economics, 2010, vol. 17, issue 3, 253-278

Abstract: The use of technical barriers to trade (TBT) is widespread and has increasing impact on international trade. In contrast to most other trade measures, TBT have both trade promotion and trade restriction effects. Due to their theoretical complexity and data scarcity, TBT have been considered as one of the most difficult non-tariff barriers (NTBs) to quantify. In this paper, we construct a TBT database from 1998–2006 to examine the influence of TBT imposed by China on the country's imports. When using the frequency index, we find that TBT are trade restrictive: a one unit increase in TBT will decrease import value by about 0.8%. However, when the coverage ratio is used, we find that the negative effects of TBT are not statistically significant based on the entire period. However, if the focus is shifted to data from 1998–2001, we find that TBT have trade promotion effects. A one unit increase in TBT will increase import value by about 0.2%. Finally, China's TBT (measured by both frequency index and coverage ratio) are trade restricting for agriculture goods but trade promoting for manufacturing goods.

Date: 2010
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DOI: 10.1080/16081625.2010.9720865

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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