Impact of non-tariff measures on SMEs in Tunisia

Tunisia - 17 February 2018

This paper analyses the overall effect of Non-Tariff Measures (NTMs) on firms in Tunisia, with a particular attention paid to small and medium-sized enterprises (SMEs). It draws a precise view of NTMs effects on firms’ imports as well as on firms’ productivity, costs and profits. We use firm-level data to take into account firm heterogeneity whose importance has been highlighted in recent literature. Results show a positive impact of NTMs on imports, productivity, labor costs and profitability. They highlight thus a trade-creation effect of NTMs as well as an enhanced learning by importing effect with NTMs. When splitting the global sample into small, medium and large firms, results exhibit a weaker trade-creation effect for SMEs and a greater learning by importing effect for large firms. An extended analysis, separating importing and exporting firms from those solely importing, suggests that two-ways traders benefit most from positive effects of NTMs. However, estimates controlling for offshore firms show a trade-diversion effect for those firms.

Author(s): Leila Baghdadi, Sonia Ben Kheder, Hassen Arouri