Technical Standards, Intermediate Inputs and Sourcing Decisions

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, February 8, 2022: Irene Iodice from the University of Bielefeld will present the paper "Technical Standards, Intermediate Inputs and Sourcing Decisions".

Abstract:

Motivated by the growing share of technical standards regulating intermediate inputs, this paper investigates the role of standards in the sourcing decisions of international firms. The authors begin by building a novel database which fills the missing information on the product classification of all technical barriers to trade (TBTs) that have been notified to the WTO over the period 1995-2020, improving on the coverage of TBTs. They combine this information with a World Bank database on the depth of trade agreements and then cross-reference it with a firm-level panel of French importers. Following the enforcement of a TBT by the EU, the authors observe a trade diversion towards the European countries in the harmonized sectors on the intensive margin, the quantity imported increases by 3.9%. The authors find that trade diversion reinforces existing sourcing relationships, with no significant entry nor exit in new sourcing countries within the EU. Diversion happens mostly away from less developing countries and its effects are heterogeneous across firms and products.

The seminar will be held in blended mode. In person participation is possible and available seats are allocated on a first come first served basis. For online participation please use the following link.