Discussion Paper

No. 2011-38 | September 14, 2011
Trade Policy versus Trade Facilitation: An Application Using "Good Old" OLS


Trade policy barriers are only one element of overall trade costs. Among these, and due to the decrease in the influence of tariff barriers on trade over time, institutional barriers might increase in relative importance and become a key obstacle to the movements of goods across countries. This paper quantifies and compares the impact that a number of trade facilitation and trade policy barriers have on bilateral trade flows. A theoretically justified gravity model of trade is estimated by using the methodology proposed in Baier and Bergstrand (2009) for a cross-section of countries in the year 2000. Results indicate that institutional trade barriers have a greater impact on trade flows than tariff barriers. According to these findings, trade policy negotiation efforts should focus on facilitating trade processes and should be at the forefront of multilateral negotiations.

Paper submitted to the special issue
Trade Facilitation, Transport Costs and Logistics: A New Challenge for European Competitiveness

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Cite As

Laura Márquez-Ramos, Inmaculada Martínez-Zarzoso, and Celestino Suárez-Burguet (2011). Trade Policy versus Trade Facilitation: An Application Using "Good Old" OLS. Economics Discussion Papers, No 2011-38, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2011-38

Comments and Questions

G Y - article Trade Policy versus Trade Facilitation
September 15, 2011 - 07:15

An interesting subject and a strong empiric analysis. The source of equations (1) and (2) and the relationship between them are not explained enough. There is an article of other authors cited for the methodology used. But this is not enough. At least, for me this was not clear enough.

Anonymous - Referee Report 1
September 26, 2011 - 09:05

see attached file

Laura Márquez Ramos - Reply to Referee Report 1
February 27, 2012 - 11:21

see attached file

Anonymous - Invited Reader Comment
October 10, 2011 - 09:42

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Laura Márquez Ramos - Reply to Invited Reader Comment
February 27, 2012 - 11:24

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Laura Márquez Ramos - Revised Version
February 27, 2012 - 11:26

see attached file