Harmonization of regulations and trade : empirical evidences for the european manufacturing sector
Abstract (Summary)As trade among members of the European Union (EU) is now free of tariffs, the harmonization of technical regulations or standards has become an important issue for deeper integration of the internal market. A previous analysis of the completion of the Single Market calculated that in 1996 about 80% of intra-EU trade was been affected by harmonization of technical regulations. A major objective of this thesis is to examine to what extent harmonization of regulations has reduced the so called border effect. After a brief survey of the gravity literature, we propose and test some economic and econometric extensions of the standard gravity model. This model is then applied to total manufacturing as well as to more detailed levels corresponding to different harmonization approaches. We find that harmonization of technical regulations has a positive impact on imports of total manufacturing. However, this hardly explains the importance of border effects within the EU. This result is supported at a more disaggregated level when we distinguish between manufacturing sectors according to the type of EU harmonization including the category where technical barriers do not apply. In addition, sectors where harmonization is of minor importance exhibit smaller border effects. The last part of the thesis examines, with particular reference to EU and enlargement, how environmental regulations at the national and EU level have collided and affected exports. The major findings are that more harmonization has been accompanied by higher levels of domestic environmental regulations in candidate countries. In addition, the level of domestic environmental regulations - when treated endogenously - has a larger negative effect on EU exports. We employ a newly constructed data set that contains information at the three digit level of manufacturing industries. For each industry we identify the dominant harmonization approach used by the European Commission to the removal of technical barriers to trade in the EU.
Source Type:Master's Thesis
Keywords:harmonization of regulations gravity border effects
Date of Publication:12/20/2004