Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation

December 1, 2001

Preview Citation

Format: Chicago

Qing Wang. Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation, (USA: International Monetary Fund, 2001) accessed November 8, 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

A comprehensive empirical investigation is carried out to ascertain the import-reducing effect of trade protection barriers. We first present a statistical summary of the status of global trade protection. Then, based on a monopolistic competition trade model and 1994 cross-country data on trade barriers, trade flows, and production, we estimate the import-reducing effect of trade barriers including both tariffs and non-tariff barriers (NTBs). We use the disaggregated cross-country, cross-industry data on manufactured goods and, unlike previous studies, our sample covers a broad range of countries-more than 70 in total-including countries from the most developed ones like those in the Group of Seven to the least developed one, Bangladesh. We specify an empirical model that captures the stylized facts well and helps generate sensible estimates. Our econometric framework is designed to control for the simultaneous determination of trade flows, trade barriers, and production. We find that both tariff and NTBs are quite significant in restricting imports.

Subject: Econometric analysis, Estimation techniques, Imports, International trade, Tariffs, Taxes, Trade balance, Trade barriers

Keywords: Africa, Estimation techniques, Global, Import NTBs, Import penetration, Imports, Monopolistic competition, Non-tariff trade barriers, NTBs coverage ratios, NTBs equation, Protection equation, Rank correlation, Regime yield, Simultaneity problem, Tariff, Tariff rate, Tariffs, Trade balance, Trade barriers, Trade protection data, Trade protection regime, Trade-Barriers, WP

Publication Details

Pages:

54
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/216
Stock No:

WPIEA2162001
ISBN:

9781451954692
ISSN:

1018-5941

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