Description
Non-tariff measures (NTM) influence firm’s production and export decisions. The most productive firms produce better quality products and respond differently than less productive firms when NTMs are introduced.
We test predictions of the model by looking at food-processing firms in Ukraine in 2008-2013 and find evidence that more stringent NTM regulations force firms to purchase ingredients of better quality, increasing costs and changing composition of inputs from the upstream industries. Also, NTMs play a role of a positive demand shifter.
Interplay of these two factors lead to ambiguous impact of NTMs on export at extensive and intensive margins.
When: December 6th 2018, at 15.30
Presenter: Volodymyr Vakhitov