We use cookies on this website to give you a better user experience. By continuing to browse the site, you are agreeing to our use of cookies. Learn more

Tariff Pass-through of the World-wide Trade: Empirical Evidence at Tariff-line Level

Tariff Pass-through of the World-wide Trade: Empirical Evidence at Tariff-line Level
Date:
28 April 2015
Category:
Trade
Tags:

Print Article:

Abstract


This paper provides the first empirical evidence about the tariff pass-through in world-wide trade. Specifically, we estimate the effects of tariff reduction on import prices for our tariff line-level data in 46 importing countries in 2007-2011. The estimation results show that the average pass-through rate for tariff reduction by regional trade agreements (RTAs) is higher than that for reduction by the most favoured nation rates. Namely, most of the tariff rent goes to the importer in the case of multilateral trade liberalization and to the exporter in the case of trade liberalization by RTAs. We also find that product differentiation has an impact of a substantial magnitude on the tariff pass-through for RTAs. The difference in income level of country pairs affects much the tariff pass-through for RTAs. Bargaining over prices between the importer and exporter might explain these results because the use of RTAs requires exporters to incur some costs for certifying the products' origin.

ERIA-DP-2015-34

Search ERIA.org

Latest Multimedia

Indonesia's ASEAN Chairmanship 2023 High-Level Policy Dialogue: ASEAN Digital Community 2045

ERIA Knowledge Lab Discusses Scaling Up Innovation and Digital Technology Ecosystem

Is ASEAN Ready for Electric Vehicles? | ASEAN Insights Podcast

Latest Articles

trade, semiconductor trade, trade network, regional trade, COVID-19, ASEAN
23 February 2024
Editor(s)/Author(s): K.P. Prabheesh, C.T. Vidya
This paper examines the global semiconductor industry trade network[...]
ASEAN
22 February 2024
Editor(s)/Author(s):
ERIA Digital Innovation and Sustainable Economy Centre[...]