International Spillovers of Quality Regulations
Ariel Weinberger and
Luca Macedoni
Additional contact information
Ariel Weinberger: George Washington University
Working Papers from The George Washington University, Institute for International Economic Policy
Abstract:
This paper investigates the positive international spillover effects of non-discriminatory product regulations, such as quality standards. We incorporate regulations into a multi-country general equilibrium framework with firm heterogeneity and variable markups. We model regulations as a fixed cost that any firm selling to an economy must pay, consistent with stylized facts that we present. We demonstrate that in the presence of variable markups, the fixed cost generates a positive spillover on the rest of the world as it induces entry of high-quality firms, and it improves the terms of trade of the non-imposing countries. We argue that the benefits of such regulations are not fully realized under non-cooperative policy settings, leading to a call for international cooperation in setting regulations. We estimate our model and apply its gravity formulation to quantify the global welfare consequences of altering regulatory policies, the extent of the positive externalities across countries, the effects of cooperation, and the comparison with further tariff liberalization. Our analysis reveals that the entry of new high-quality firms, rather than changes in terms of trade, is the main quantitative driver of international spillovers.
Keywords: Allocative Efficiency; International Spillover; Quality Standards; Variable Markups; Trade Policy (search for similar items in EconPapers)
JEL-codes: F12 F13 L11 (search for similar items in EconPapers)
Pages: 75 pages
Date: 2023-10
New Economics Papers: this item is included in nep-int and nep-reg
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www2.gwu.edu/~iiep/assets/docs/papers/2023WP/WeinbergerIIEP2023-10.pdf (application/pdf)
Related works:
Working Paper: International Spillovers of Quality Regulations (2024) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2023-10
Access Statistics for this paper
More papers in Working Papers from The George Washington University, Institute for International Economic Policy Contact information at EDIRC.
Bibliographic data for series maintained by Kyle Renner ().