Non-Tariff Measures, Import Competition, and Exports

Massimiliano Calì and Angella Montfaucon

No 9801, Policy Research Working Paper Series from The World Bank

Abstract: The empirical evidence on the impact of import competition on economic performance relies mainly on import tariff liberalization as the source of changes to competition. This paper extends this evidence by focusing on non-tariff measures, an increasingly important trade policy tool globally. The analysis examines the competition effect of four specific non-tariff measures on the exporting activity of the universe of Indonesian firms. The focus is on measures that do not clearly address any negative externalities of imports—the supposed objective of non-tariff measures—and hence appear to be protectionist in nature. The results suggest that by restricting import competition, these measures reduce the survival of firms in export markets as well as the intensive and extensive margins of their exports. Non-tariff measures have a more negative effect than import tariffs in most cases and these results are robust to various checks. The analysis provides suggestive evidence that markups are an important channel through which these effects are mediated.

Keywords: International Trade and Trade Rules; Business Cycles and Stabilization Policies; Construction Industry; Plastics & Rubber Industry; Pulp & Paper Industry; Textiles; Apparel & Leather Industry; General Manufacturing; Food & Beverage Industry; Common Carriers Industry; Trade and Multilateral Issues; Trade Policy; Rules of Origin (search for similar items in EconPapers)
Date: 2021-10-08
New Economics Papers: this item is included in nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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