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A growing share of modern trade policy instruments is shaped by non-tariff barriers (NTBs). Based on a structural gravity equation and the recently updated Global Trade Alert database, we empirically investigate the effect of NTBs on imports. Our analysis reveals that the implementation of NTBs reduces imports of affected products by up to 12%. Their trade dampening effect is thus comparable to that of trade defence instruments such as anti-dumping duties. It is smaller for exporters that have a free trade agreement with the importing country. Different types of NTBs affect trade to a different extent. Finally, we investigate the effect of behind-the-border measures, showing that they significantly lower the importer’s market access.
This paper examines how varying antidumping methodologies applied within the World Trade Organization differ in the extent to which they reduce targeted exports. We show that antidumping duties, on average, hit Chinese exporters harder than those of other targeted countries. This difference can be traced back in part to China's non-market economy status, which affects the way antidumping duties are calculated. Furthermore, we show that the type of imposed duty matters, as ad-valorem duties affect exports differently compared to specific duties or duties conditional on the export price. Overall, however, antidumping duties remain effective in reducing imports independent of market economy status.
Many countries offer state credit guarantees to support credit-constrained exporters. The policy instrument is commonly justified by governments as a means to mitigating adverse outcomes of financial market frictions for exporting firms. Accumulated returns to the German state credit guarantee scheme deriving from risk-compensating premia have outweighed accumulated losses over the past 60 years. Why do private financial agents not step in and provide insurance given that the state-run program yields positive returns? We argue that costs of risk diversification, liquidity management, and coordination among creditors limit the ability of private financial agents to offer comparable insurance products. Moreover, we suggest that the government’s greater effectiveness in recovering claims in foreign countries endows the state with a cost advantage in dealing with the risks involved in large export projects. We test these hypotheses using monthly firm-level data combined with official transaction-level data on covered exports of German firms and find suggestive evidence that positive effects on trade are due to mitigated financial constraints: State credit guarantees benefit firms that are dependent on external finance, if the value at risk which they seek to cover is large, and at times when refinancing conditions on the private financial market are tight.