Non-Tariff Measures and Competitiveness

In this paper, we explore how tariff and standard-like Non-Tariff Measures (NTMs) introduced by the EU are related with market conditions in domestic markets. While Tariffs work as a pure tax on import, NTMs potentially affcet costs of both firms foreign exporters. may not necessarily protectionist measures even induce pro-competitive effects longer term, especially if allow for mobility. The impact could be different large small firms. We extend model Melitz Ottaviano (2008) to include barriers. derive some testable implications relating barriers number selling average efficiency. link between depends whether they involve new standards technical specifications imposed or, rather, extension already adopted first case, there is decline productivity; second effects: an increase productivity. then take data group European countries manufacturing industries. combine Compnet 15 2001-2012, providing information performance at industry level size class, STC WTO-I-TIP database, Specific Trade Concerns raised WTO Trains database Tariffs. that consider have similar case theoretical model; results Tariff same direction, albeit larger magnitude. These consistent framework allowing firm mobility term.