The Impacts of Technical Barriers to Trade on Different Components of International Trade

This research studies the impacts of technical barriers to trade (TBT) on trade performance of 103 countries over the period 1995-2008. The paper analyzes how TBT influences the trade probability, trade volume and trade duration. The trade volume is further decomposed into the number of products traded (extensive margin) and the trade value of each product (intensive margin). It is found that TBT imposes inconsistent impacts on the different components of trade, and that the effects differ by country. First, TBT reduces trade probability, but increases the volume and duration of existing trade relationships. Second, the positive effect of TBT on trade volume is mainly driven by an increase in the extensive margin, and the effect on the intensive margin is not statistically significant. Finally, TBT raised by developed countries have a stronger negative impact on trade probability, while TBT implemented by developing countries have a greater positive effect on trade volume.