Endogenous Export Costs and the Role of Transaction Barriers in International Trade

45 Pages Posted: 20 Sep 2019

See all articles by Horag Choi

Horag Choi

Monash University, Economics Department

Julio Mancuso Tradenta

La Trobe University - Department of Economics & Finance

Christis G. Tombazos

Monash University - Department of Economics

Date Written: January 1, 2019

Abstract

With the virtual disappearance of tariffs, domestic export time delays have emerged as a major obstacle to trade. This explains recent WTO initiatives to combat such delays that have resulted in important reductions in forty percent of developing countries. We propose a novel mechanism by which reductions in delays induce governments to increase the export fees they charge exporters, and test this prediction empirically. Our results support this form of endogenous export fees. They also show that for exporters of low-value and time-insensitive goods, such as many developing countries, export fees are as significant an impediment to exports as delays.

Keywords: Endogenous trade costs, export delays, time sensitivity, developing countries

JEL Classification: F1, F13, F14, F15

Suggested Citation

Choi, Horag and Mancuso Tradenta, Julio and Tombazos, Christis G., Endogenous Export Costs and the Role of Transaction Barriers in International Trade (January 1, 2019). Available at SSRN: https://ssrn.com/abstract=3452417 or http://dx.doi.org/10.2139/ssrn.3452417

Horag Choi

Monash University, Economics Department ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
+61-3-9903-2848 (Phone)

Julio Mancuso Tradenta (Contact Author)

La Trobe University - Department of Economics & Finance ( email )

Donald Whitehead Building: Level 3, DWB313
Department of Economics & Finance
Bundoora, Victoria 3086
Australia

Christis G. Tombazos

Monash University - Department of Economics ( email )

Australia

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