Border and Behind-the-Border Trade Barriers and Country Exports
IMF Working Papers, December 1, 2007
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Bibliographic details
- Authors: Azim M Sadikov
- Published: December 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868555.001
Overview and research question
- Research question: How do signatures required for exporting and business registration procedures affect the volume and composition of country's exports?
- Framework: A model where a country can export two types of products: differentiated and homogeneous.
Model and mechanism
- Export signatures and registration procedures increase transaction costs and therefore reduce overall exports.
- The impact varies by product type:
- Differentiated products are more sensitive to export signatures because the lack of price data on differentiated products due to their heterogeneity increases sensitivity to such frictions.
- Homogeneous products are less affected relative to differentiated products.
Empirical findings
- Each extra signature exporters have to collect before a shipment can take place reduces aggregate exports by 4.2 percent.
- Each signature lowers exports of differentiated products by 4-5 percent more than exports of homogeneous goods.
- Business registration procedures affect exports of differentiated products only.
Magnitude and comparisons
- The reduction in aggregate exports from one additional required signature is equivalent to raising importer's tariff by 5 percentage points.
Policy implications and recommendations
- Reducing the number of signatures required for export shipments would lower transaction costs and increase aggregate exports.
- Simplifying or reforming business registration procedures could specifically boost exports of differentiated products.
- Trade facilitation reforms that target border and behind-the-border administrative procedures can have export-enhancing effects, particularly for differentiated-product exporters.
Border and Behind-the-Border Trade Barriers and Country Exports — ByAzim M Sadikov — December 1, 2007