Endogenous Export Costs and the Role of Transaction Barriers in International Trade
45 Pages Posted: 20 Sep 2019
Date Written: January 1, 2019
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: Suggested Citation