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Endogenous Border Times

Author

Listed:
  • Carballo, Jerónimo
  • Graziano, Alejandro
  • Schaur, Georg
  • Volpe Martincus, Christian
Abstract
We examine transaction-level Peruvian import data to show that firms are subject to significant costs of port-of-entry delays. At the transaction level, we observe the time it takes a shipment to clear each step in the entry process. Our theory shows conditions under which observed entry times are endogenous. As a result, total entry delays potentially lead to biased policy conclusions and non-informative efficiency rankings of countries' entry procedures. We make three empirical contributions that help unbundle sources for time costs in trade and border effects. First, we provide evidence that at least part of the total port-entry-time is endogenous. Second, we identify the effect of entry delays on imports based on exogenous necessary entry processing. Third, we provide evidence that trade costs due to entry delays are heterogeneous across firm types. New and large importersare more elastic with respect to entry delays. This information allows researchers and policymakers to interpret aggregate port of entry delay data and their costs across different types of firms.

Suggested Citation

  • Carballo, Jerónimo & Graziano, Alejandro & Schaur, Georg & Volpe Martincus, Christian, 2016. "Endogenous Border Times," IDB Publications (Working Papers) 7685, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:7685
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    References listed on IDEAS

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    Cited by:

    1. Harald Oberhofer & Michael Pfaffermayr & Richard Sellner, 2021. "Revisiting time as a trade barrier: Evidence from a panel structural gravity model," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1382-1417, November.
    2. Sonali Chowdhry & Gabriel Felbermayr, 2023. "Trade liberalization along the firm size distribution: The case of the EU‐South Korea FTA," Review of International Economics, Wiley Blackwell, vol. 31(5), pages 1751-1792, November.
    3. Jerónimo Carballo & Alejandro Graziano & Georg Schaur & Christian Volpe Martincus, 2021. "Import Processing and Trade Costs," CESifo Working Paper Series 9170, CESifo.
    4. Bryan Roberts & Fynnwin Prager & Charles Baschnagel & Adam Rose & Brett Shears, 2021. "The economic benefits of trade facilitation: U.S. Customs and Border Protection’s Centers of Excellence and Expertise programme," The World Economy, Wiley Blackwell, vol. 44(2), pages 346-366, February.
    5. Olarreaga, Marcelo, 2016. "Trade, Infrastructure, and Development," ADBI Working Papers 626, Asian Development Bank Institute.
    6. Giovanni Maggi & Monika Mrázová & J. Peter Neary, 2022. "Choked By Red Tape? The Political Economy Of Wasteful Trade Barriers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 161-188, February.

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    More about this item

    Keywords

    entry delays; trade; customs; integration;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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