Effects of Trade Facilitation on Sectoral Trade

Tunisia - 9 August 2017

This contribution focuses on the analysis of the relationship between trade facilitation, transport costs and sectoral trade in developing countries. A gravity model is estimated using sectoral exports from 181 countries over the period 2004-2013. The model is augmented with maritime transport infrastructure and trade facilitation variables. In particular, the logistic performance index (LPI), time delays and number of bureaucratic procedures are used to proxy for maritime transport infrastructure and trade facilitation variables, respectively. The main findings show that time delays significantly decrease trade flows and that both, maritime infrastructure and institutional trade barriers (trade facilitation factors), are important factors influencing sectoral trade.

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