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How exporting firms respond to technical barriers to trade?

How exporting firms respond to technical barriers to trade? This paper investigates how technical barriers to trade (TBTs) affect firm exports. The implementation of the “child‐resistance” decision (CR decision) in the EU offers an ideal quasi‐natural experiment to identify the causal effect of TBTs on firm performance. Using data on Chinese firms that exported cigarette lighters between 2004 and 2010, we show that firms exporting to the EU not only adjust their product quality to meet the requirements in the CR decision, but also upgrade their product quality in other dimensions. However, both the export value and export volume to the EU decline. At the same time, less productive exporters are forced to exit from the EU market. Lastly, heterogeneous effects of the CR decision are documented. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The World Economy Wiley

How exporting firms respond to technical barriers to trade?

The World Economy , Volume 42 (5) – May 1, 2019

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References (71)

Publisher
Wiley
Copyright
"Copyright © 2019 John Wiley & Sons Ltd"
ISSN
0378-5920
eISSN
1467-9701
DOI
10.1111/twec.12786
Publisher site
See Article on Publisher Site

Abstract

This paper investigates how technical barriers to trade (TBTs) affect firm exports. The implementation of the “child‐resistance” decision (CR decision) in the EU offers an ideal quasi‐natural experiment to identify the causal effect of TBTs on firm performance. Using data on Chinese firms that exported cigarette lighters between 2004 and 2010, we show that firms exporting to the EU not only adjust their product quality to meet the requirements in the CR decision, but also upgrade their product quality in other dimensions. However, both the export value and export volume to the EU decline. At the same time, less productive exporters are forced to exit from the EU market. Lastly, heterogeneous effects of the CR decision are documented.

Journal

The World EconomyWiley

Published: May 1, 2019

Keywords: ; ;

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