Trade Effects of Regional Standards Liberalization : A Heterogeneous Firms Approach
This study investigates trade effects of the regional liberalization of technical barriers to trade (TBTs) in the form of harmonization and mutual recognition agreements (MRAs) for testing procedures. The theoretical part of the paper is framed in...
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Format: | Policy Research Working Paper |
Language: | English |
Published: |
World Bank, Washington, DC
2012
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Online Access: | http://documents.worldbank.org/curated/en/2007/02/7401769/trade-effects-regional-standards-liberalization-heterogeneous-firms-approach http://hdl.handle.net/10986/7156 |
Summary: | This study investigates trade effects of
the regional liberalization of technical barriers to trade
(TBTs) in the form of harmonization and mutual recognition
agreements (MRAs) for testing procedures. The theoretical
part of the paper is framed in terms of a heterogeneous
firms approach. This paper adds to the existing literature
by formalizing the effects of MRAs and harmonization
initiatives on bilateral trade flows and by applying this
new theoretical framework in the empirical part of the
paper. The latter consists of a two-stage gravity estimation
and investigates sectoral effects of TBT liberalization on
parties to the agreement as well as excluded industrial and
developing countries. It finds that MRAs have a strong
positive influence on both export probabilities and trade
volumes for partner countries. Regarding harmonization,
results seem to suggest that the impact on parties to the
agreement is negligible, however that on excluded OECD
countries is large and positive. Third party developing
countries do not seem to benefit from the market integration
effect brought about by harmonization in other regions.
Overall, effects on the probability that a new firm will
export are much more pronounced than effects on the trade
volumes of incumbent exporters. |
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