The cost of borders: Evidence from the Eurasian Customs Union

Arbeitspapier

How strongly can the reduction in bureaucracy and red tape at the border increase trade? To address this, we study an ambitious trade facilitation policy - the complete abolition of internal customs controls - in the Eurasian Customs Union. Using a structural gravity model with high-dimensional fixed effects, we find evidence that non-tariff trade facilitation strongly and robustly increases the number of newly traded products. The value of trade, however, reacts more strongly to a traditional tariff-driven diversion of trade towards union members. Trade facilitation policies can diversify bilateral trade, highlighting the importance of trade analysis at the extensive margin.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Hannover Economic Papers (HEP) ; No. 664

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Economic Integration ; International Institutional Arrangements
• Subject: Außenhandel ; Grenze ; Handelsabkommen ; Nichttarifäre Handelshemmnisse ; Russland ; Weißrussland ; Kasachstan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gnutzmann, Hinnerk ; Gnutzmann-Mkrtchyan, Arevik
• Event: Veröffentlichung
• (who): Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/216964