Border and Behind-the-Border Trade Barriers and Country Exports

December 1, 2007

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Format: Chicago

Azim M Sadikov. Border and Behind-the-Border Trade Barriers and Country Exports, (USA: International Monetary Fund, 2007) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

How do signatures required for exporting and business registration procedures affect the volume and composition of country's exports? To answer this question, I develop a model where a country can export two types of products: differentiated and homogeneous. I show that export signatures and registration procedures reduce overall exports by increasing transaction costs. The impact, however, varies across goods according to the product's degree of differentiation- the lack of price data on differentiated products due to their heterogeneity makes them more sensitive to export signatures. Regressions show that each extra signature exporters have to collect before a shipment can take place reduces aggregate exports by 4.2 percent. The impact is large, equivalent to raising importer's tariff by 5 percentage points. Furthermore, each signature lowers exports of differentiated products by 4-5 percent more than exports of homogeneous goods. I find evidence that business registration procedures affect exports of differentiated products only.

Subject: Commodities, Exports, Imports, Tariffs, Trade facilitation

Keywords: Marginal cost, Transaction costs, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/292
Stock No:

WPIEA2007292
ISBN:

9781451868555
ISSN:

1018-5941

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