How do technical barriers to trade influence trade?

Xiaohua BAO, Larry D. QIU*

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)

21 Citations (Scopus)

Abstract

This paper empirically estimates the trade effects of technical barriers to trade (TBT) based on all TBT notifications from 105 World Trade Organization (WTO) countries during 1995–2008. The paper adopts a modified two-stage gravity model to control for both sample selection bias and firm heterogeneity bias. It was found that a country’s TBT notifications decrease other countries’ probability of exporting, but increase their export volumes. The result can be explained by the TBT’s differential effects on the fixed and variable cost of export, and consumer confidence. It was further found that (i) a developing country’s TBT have significant effects on other developing countries’ exports, but no significant effects on the developed countries’ exports, (ii) a developed country’s TBT have significant effects on the exports from both types of countries, and (iii) exports from developed countries are affected by a developed country’s TBT more seriously than a developing country’s TBT.
Original languageEnglish
Pages (from-to)691-706
Number of pages16
JournalReview of International Economics
Volume20
Issue number4
Early online date23 Aug 2012
DOIs
Publication statusPublished - Sep 2012
Externally publishedYes

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Bibliographical note

The authors benefitted from presenting the paper in the 2nd IEFS (China) Annual Meeting in May, 2010, in Beijing. The authors acknowledge the financial support from the Hong Kong Government’s Competitive Earmarked Research Grant 2008-2010 (HKU643108H), the Mrs. Li Ka ShingFund of the University of Hong Kong, the Fok Ying Tung Education Foundation (121085), Natural Science Foundation of China (70703021), NSFC Grant 20212, and Ministry of Education of China (NCET-10-0537).

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