[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/a/eee/inteco/v173y2023icp45-67.html
   My bibliography  Save this article

Exploring the ‘non-tariff measures black box’: Whose regulatory NTMs on which products improve the imported quality?

Author

Listed:
  • Ghodsi, Mahdi
Abstract
Regulatory non-tariff measures (NTMs), such as technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures, have frequently been imposed to regulate the importing market when the market fails to address some issues of concern regarding harmful products. The mechanism through which regulatory NTMs affect the quality of imported products seems like a ‘Black Box’, which is fully opened and analysed in this paper. Our research is built on a monopolistic competition framework, in which firms choose both the quality and the price of their exports subject to the compliance costs of NTMs and a fixed cost of technological change or bureaucratic procedures. The quality of products at the six-digit level of the Harmonised System (HS) traded globally and bilaterally during the period 1996–2017 is then estimated. Using these estimates, the impacts of TBTs and SPS measures on trade values, volume, unit value and quality are estimated. Then, by estimating the importer-specific impact of NTMs on trade indicators for each product, the NTM Black Box is opened and analysed.

Suggested Citation

  • Ghodsi, Mahdi, 2023. "Exploring the ‘non-tariff measures black box’: Whose regulatory NTMs on which products improve the imported quality?," International Economics, Elsevier, vol. 173(C), pages 45-67.
  • Handle: RePEc:eee:inteco:v:173:y:2023:i:c:p:45-67
    DOI: 10.1016/j.inteco.2022.11.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2110701722000956
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.inteco.2022.11.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    3. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    4. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    5. Fontagné, Lionel & Orefice, Gianluca & Piermartini, Roberta & Rocha, Nadia, 2015. "Product standards and margins of trade: Firm-level evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 29-44.
    6. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    7. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    8. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    9. Xavier Gabaix & Rustam Ibragimov, 2011. "Rank - 1 / 2: A Simple Way to Improve the OLS Estimation of Tail Exponents," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 24-39, January.
    10. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    11. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    12. Eyal RONEN, 2017. "Quantifying the trade effects of NTMs: A review of the empirical literature," Journal of Economics and Political Economy, KSP Journals, vol. 4(3), pages 263-274, September.
    13. Yuan Li & John C. Beghin, 2017. "A meta-analysis of estimates of the impact of technical barriers to trade," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 4, pages 63-77, World Scientific Publishing Co. Pte. Ltd..
    14. Peter K. Schott, 2004. "Across-Product Versus Within-Product Specialization in International Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 647-678.
    15. Jafari, Yaghoob & Britz, Wolfgang, 2018. "Modelling heterogeneous firms and non-tariff measures in free trade agreements using Computable General Equilibrium," Economic Modelling, Elsevier, vol. 73(C), pages 279-294.
    16. Daron Acemoglu & Jaume Ventura, 2002. "The World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 659-694.
    17. Ayoub Yousefi & Mengyi Liu, 2013. "The Impact of Technical Barriers to Trade: The Cases of Trade Between China, Japan, Korea, and the US," Contributions to Economics, in: Pang Chuan & Vasil Khachidze & Ivan K.W. Lai & Yide Liu & Sohail Siddiqui & Tim Wang (ed.), Innovation in the High-Tech Economy, edition 127, pages 23-34, Springer.
    18. Tsunehiro Otsuki & John S. Wilson, 2001. "What price precaution? European harmonisation of aflatoxin regulations and African groundnut exports," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(3), pages 263-284, October.
    19. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    20. Amit Khandelwal, 2010. "The Long and Short (of) Quality Ladders," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1450-1476.
    21. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    22. Julien Gourdon & Susan Stone & Frank van Tongeren, 2020. "Non-tariff measures in agriculture," OECD Food, Agriculture and Fisheries Papers 147, OECD Publishing.
    23. Zhaohui Niu & Chang Liu & Saileshsingh Gunessee & Chris Milner, 2018. "Non-tariff and overall protection: evidence across countries and over time," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(4), pages 675-703, November.
    24. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 609-644.
    25. Xiaohua Bao & Larry D. Qiu, 2012. "How Do Technical Barriers to Trade Influence Trade?," Review of International Economics, Wiley Blackwell, vol. 20(4), pages 691-706, September.
    26. Chang Liu & Dongtao Lin & Jiawei Liu & Yanran Li, 2019. "Quantifying the effects of non-tariff measures on African agri-food exporters," Agrekon, Taylor & Francis Journals, vol. 58(4), pages 451-471, October.
    27. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    28. repec:hal:spmain:info:hdl:2441/6apm7lruv088iagm4rv2c33jtg is not listed on IDEAS
    29. Mike Webb & Anna Strutt & John Gibson & Terrie Walmsley, 2020. "Modelling the impact of non‐tariff measures on supply chains in ASEAN," The World Economy, Wiley Blackwell, vol. 43(8), pages 2172-2198, August.
    30. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    31. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers hal-03579844, HAL.
    32. Robert C. Feenstra & John Romalis, 2014. "International Prices and Endogenous Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 477-527.
    33. Mahdi Ghodsi, 2020. "The impact of Chinese technical barriers to trade on its manufacturing imports when exporters are heterogeneous," Empirical Economics, Springer, vol. 59(4), pages 1667-1698, October.
    34. Veronika Movchan & Leksandr Shepotylo & Volodymyr Vakhitov, 2020. "Non-tariff measures, quality and exporting: evidence from microdata in food processing in Ukraine [Identification properties of recent production function estimators]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(2), pages 719-751.
    35. Michael Bratt, 2017. "Estimating the bilateral impact of nontariff measures on trade," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 1105-1129, November.
    36. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    37. Cadot, Olivier, 2015. "NTMs, Preferential Trade Agreements, and Prices: New evidence," Papers 807, World Trade Institute.
    38. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-973, October.
    39. Essaji, Azim, 2008. "Technical regulations and specialization in international trade," Journal of International Economics, Elsevier, vol. 76(2), pages 166-176, December.
    40. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    41. Fugazza, Marco & Maur, Jean-Christophe, 2008. "Non-tariff barriers in CGE models: How useful for policy?," Journal of Policy Modeling, Elsevier, vol. 30(3), pages 475-490.
    42. repec:hal:pseose:hal-00610947 is not listed on IDEAS
    43. Michael J. Ferrantino, 2006. "Quantifying the Trade and Economic Effects of Non-Tariff Measures," OECD Trade Policy Papers 28, OECD Publishing.
    44. Singh, Rahul & Chanda, Rupa, 2021. "Technical regulations, intermediate inputs, and performance of firms: Evidence from India," Journal of International Economics, Elsevier, vol. 128(C).
    45. Olivier Cadot & Julien Gourdon & Frank van Tongeren, 2018. "Estimating Ad Valorem Equivalents of Non-Tariff Measures: Combining Price-Based and Quantity-Based Approaches," OECD Trade Policy Papers 215, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nguyen Bich Ngoc & Luu Hai Dang & Ngo Thi Tuyet Mai & Nguyen Thi Thuy Hong & Do Thi Huong & Tran Hoang Ha, 2024. "Heterogeneous trade effects of technical non‐tariff measures: Vietnamese agricultural imports," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 38(1), pages 131-144, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Irfan Aleem & Bushra Faizi, 2021. "Non-tariff Measures, Overall Protection and Export Competitiveness: Evidence from Pakistan and Regional Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(3), pages 251-282.
    2. Mahdi Ghodsi, 2021. "Exploring ‘Non-Tariff Measures Black Box’: Whose Regulative NTMs on Which Products Improve the Imported Quality?," wiiw Working Papers 195, The Vienna Institute for International Economic Studies, wiiw.
    3. Payam Elhami & Mahdi Ghodsi & Robert Stehrer, 2021. "Quality of Goods Imports: Which Role for Non-tariff Measures?," wiiw Policy Notes 46, The Vienna Institute for International Economic Studies, wiiw.
    4. Kan Yue, 2022. "Non‐tariff measures, product quality and import demand," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 870-900, April.
    5. Ha Thi Thanh Doan & Hongyong Zhang, 2024. "Technical barriers to trade, product quality and trade margins: firm-level evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(3), pages 785-811, August.
    6. Mahdi Ghodsi, 2020. "The impact of Chinese technical barriers to trade on its manufacturing imports when exporters are heterogeneous," Empirical Economics, Springer, vol. 59(4), pages 1667-1698, October.
    7. Dela-Dem Doe Fiankor & Daniele Curzi & Alessandro Olper, 2021. "Trade, price and quality upgrading effects of agri-food standards [Endogenous Trade Policy with Heterogeneous Firms]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(4), pages 835-877.
    8. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    9. Mahdi Ghodsi & Robert Stehrer, 2022. "Trade policy and global value chains: tariffs versus non-tariff measures," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(3), pages 887-916, August.
    10. Crinò, Rosario & Ogliari, Laura, 2015. "Financial Frictions, Product Quality, and International Trade," CEPR Discussion Papers 10555, C.E.P.R. Discussion Papers.
    11. Redding, Stephen J. & Weinstein, David E., 2024. "Accounting for trade patterns," Journal of International Economics, Elsevier, vol. 150(C).
    12. Doan Thi Thanh Ha & Hongyong Zhang, 2022. "Technical Barriers to Trade, Product Quality and Trade Margins: Firm-level Evidence," Working Papers DP-2021-54, Economic Research Institute for ASEAN and East Asia (ERIA).
    13. Chen, Natalie & Juvenal, Luciana, 2022. "Markups, quality, and trade costs," Journal of International Economics, Elsevier, vol. 137(C).
    14. Jonathan Eaton & Ana Cecília Fieler, 2019. "The Margins of Trade," NBER Working Papers 26124, National Bureau of Economic Research, Inc.
    15. Amat Adarov & Mahdi Ghodsi, 2023. "Heterogeneous effects of nontariff measures on cross‐border investments: Bilateral firm‐level analysis," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 158-179, February.
    16. Bastos, Paulo & Silva, Joana, 2010. "The quality of a firm's exports: Where you export to matters," Journal of International Economics, Elsevier, vol. 82(2), pages 99-111, November.
    17. Jihyun Eum, 2018. "Upgrading Product Quality: The Impact of Tariffs and Standards," Working Papers 2018-10, Economic Research Institute, Bank of Korea.
    18. Eum, Jihyun, 2016. "Food Safety Standards and Quality Upgrading through Import Competition," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235518, Agricultural and Applied Economics Association.
    19. repec:wsr:wpaper:y:2018:i:186 is not listed on IDEAS
    20. Curzi, Daniele & Schuster, Monica & Maertens, Miet & Olper, Alessandro, 2020. "Standards, trade margins and product quality: Firm-level evidence from Peru," Food Policy, Elsevier, vol. 91(C).
    21. Shingal, Anirudh & Ehrich, Malte, 2024. "The EU’s pesticides MRLs harmonization: effect on trade, prices and quality," Food Policy, Elsevier, vol. 125(C).

    More about this item

    Keywords

    Non-tariff measures; Technical barriers to trade; Sanitary and phytosanitary measures; Quality of products; Global bilateral trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:inteco:v:173:y:2023:i:c:p:45-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/21107017 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.