Heterogeneous Impacts of SPS and TBT Regulations : Firm-Level Evidence from Deep Trade Agreements
This paper estimates the impacts of regulating the use of sanitary and phytosanitary and technical barriers to trade measures through preferential trade agreements on exports of firms in Chile, Colombia, and Peru along the firm size spec trum. The...
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| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/201121623784576851/Heterogeneous-Impacts-of-SPS-and-TBT-Regulations-Firm-Level-Evidence-from-Deep-Trade-Agreements http://hdl.handle.net/10986/35770 |
| Summary: | This paper estimates the impacts of
regulating the use of sanitary and phytosanitary and
technical barriers to trade measures through preferential
trade agreements on exports of firms in Chile, Colombia, and
Peru along the firm size spec trum. The analysis exploits
novel data from the World Bank Deep Trade Agreements
database and customs covering the universe of exporting
firms in each country over 1996–2015. The paper uses a
firm-product gravity equation with a stringent set of fixed
effects and controls for the overall depth of the
preferential trade agreements and product-specific bilateral
tariffs. The findings show that firms’ exports increase
significantly in destination markets with preferential trade
agreements, including a larger number of sanitary and
phytosanitary and technical barriers to trade provisions,
and the effect is stronger for smaller firms. Provisions for
the harmonization of sanitary and phytosanitary regulations
in preferential trade agreements also have greater benefits
for the exports of smaller firms, and so do preferential
trade agreements, including stronger transparency provisions
for sanitary and phytosanitary and technical barriers to
trade regulations. The results are robust to dropping larger
exporters and highly concentrated export sectors to address
endogeneity. The benefits of sanitary and phytosanitary and
technical barriers to trade provisions are mainly driven by
sectors with more heavily-regulated products. Entry into new
product markets and increases in export quality partly
explain the rising exports of smaller firms. Finally, the
estimated impacts are similar regardless of the income level
of the preferential trade agreement partners. |
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