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Trade Barriers or Catalysts ? Non-Tariff Measures and Firm-Level Trade Margins
This paper empirically examines how standards and technical regulations affect export margins in three African countries at the firm level. The approach involves combining detailed customs transaction data at the firm-product level with bilateral information on non-tariff measures within a gravity model of trade framework. The findings show standards and technical regulations have no impact on the extensive margin of firm-level trade. However, they do diminish trade at the intensive margin in both the agriculture and manufacturing sectors. Small firms are more affected at the intensive margin compared to medium and large firms, and similarly, final goods are more affected compared to inter-mediate goods. Moreover, in the manufacturing sector, firms with initially higher product quality experience a reversal of the trade-reducing effect of standards and technical regulations, whereas in the agriculture sector, this effect is less pronounced for their counterparts. The results also suggest that African exporting firms face equivalent impacts in both regional and global markets.
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