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Trade Facilitation: How the burden of documentary and border procedures impact exports to the EU

Randau, Mårten LU and Wenzel, Camilla LU (2019) NEKH03 20182
Department of Economics
Abstract
How to increase trade flows in today's globalized world is a relevant topic and the incentives to do so are exemplified by the WTO Trade Facilitation Agreement that came into force in 2017. Inefficient trade procedures have proven to aggravate and decrease trade. Inefficient trade procedures could be obtaining, preparing and submitting documents about the traded good to authorities, as well as customs clearance and inspections at the border. In this paper we investigate how the world's exports to the EU are affected by these procedures. We contribute to already existing literature by using recently released data from the World Bank on time for documentary and border compliance and investigate their impact on exports. The empirical analysis... (More)
How to increase trade flows in today's globalized world is a relevant topic and the incentives to do so are exemplified by the WTO Trade Facilitation Agreement that came into force in 2017. Inefficient trade procedures have proven to aggravate and decrease trade. Inefficient trade procedures could be obtaining, preparing and submitting documents about the traded good to authorities, as well as customs clearance and inspections at the border. In this paper we investigate how the world's exports to the EU are affected by these procedures. We contribute to already existing literature by using recently released data from the World Bank on time for documentary and border compliance and investigate their impact on exports. The empirical analysis is conducted by using a gravity model with panel data and a fixed effects Poisson Pseudo-Maximum Likelihood (PPML). We find that a 1% decrease in time for documentary compliance would increase the world´s exports to the EU by 0,164%, while no such relationship can be found between border compliance and exports. However, when estimating a model with four income per capita groups, we find these relationships not to be linear which implies that different areas of reform are suitable for different countries. (Less)
Please use this url to cite or link to this publication:
author
Randau, Mårten LU and Wenzel, Camilla LU
supervisor
organization
course
NEKH03 20182
year
type
M2 - Bachelor Degree
subject
keywords
Trade Facilitation, Documentary Compliance, Border Compliance, Gravity Model
language
English
id
8974340
date added to LUP
2019-04-29 14:04:44
date last changed
2019-04-29 14:04:44
@misc{8974340,
  abstract     = {{How to increase trade flows in today's globalized world is a relevant topic and the incentives to do so are exemplified by the WTO Trade Facilitation Agreement that came into force in 2017. Inefficient trade procedures have proven to aggravate and decrease trade. Inefficient trade procedures could be obtaining, preparing and submitting documents about the traded good to authorities, as well as customs clearance and inspections at the border. In this paper we investigate how the world's exports to the EU are affected by these procedures. We contribute to already existing literature by using recently released data from the World Bank on time for documentary and border compliance and investigate their impact on exports. The empirical analysis is conducted by using a gravity model with panel data and a fixed effects Poisson Pseudo-Maximum Likelihood (PPML). We find that a 1% decrease in time for documentary compliance would increase the world´s exports to the EU by 0,164%, while no such relationship can be found between border compliance and exports. However, when estimating a model with four income per capita groups, we find these relationships not to be linear which implies that different areas of reform are suitable for different countries.}},
  author       = {{Randau, Mårten and Wenzel, Camilla}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Trade Facilitation: How the burden of documentary and border procedures impact exports to the EU}},
  year         = {{2019}},
}