Research

Quality Regulation Creates and Reallocates Trade

Quality regulation has become the dominant instrument of trade policy. Panel evidence shows that regulations classified as sanitary and phytosanitary measures and technical barriers to trade both increase trade on average. Other non-tariff measures like quotas decrease trade. Sanitary and phytosanitary measures reallocate trade from lower-income exporting countries to higher-income exporting countries, while technical barriers to trade measures do the opposite. Sanitary and phytosanitary and technical barriers to trade measures increase the sales concentration of exporting firms from lower-income countries, but do not affect the concentration of exporting firms from higher-income countries or importing firms. The costs of quality regulation are primarily borne by exporting firms, especially in lower-income countries.

The Value of Organic Certification

Consumer taste for organic products has grown, increasing demand and costs along agricultural value chains. We estimate the impact of the world’s largest certification system – USDA organic – on exporters from one of the world’s most important organic production regions – Latin America. To do so, we use a novel dataset that combines the universe of agricultural export transactions from 10 countries in Latin America with the universe of organic certifications granted by the USDA since 2012. Our results indicate that certified firms increase exports to the USA relative to non-certified firms. We develop a model of selection into organic certification, which allows us to decompose the estimated impacts into cost and demand channels.

Technology, Tax, and Domestic Trade: Evidence from Rwanda’s Electronic Invoicing Expansion

Digital technology facilitates trade but also increases the visibility of firms’ activity to the government. This paper examines the trade-off between technology adoption and regulatory exposure in the context of electronic billing machines (EBM) and business taxation in Rwanda. In December 2020, the government mandated that large firms tax deductions for purchases be validated by corresponding EBM receipts. Using a shift-share design, we find that receipt demand from large clients predicts EBM adoption and growth of small suppliers. We combine a model of invoicing in supply chains and a nationwide survey of firms to shed light on the underlying mechanisms.

New Work

1. “Regional Integration and Firm Networks in Honduras.”
2. “Trade Policy for Human Capital Development,” with William Maloney and Andres Zambrano.
3. “Supply Chain Impacts of the EU Carbon Border Adjustment Mechanism,” with Gunes Asik, Anne Brockmeyer, and Verena Wiedemann.
4. “Market Structure and Firm Dynamism across Latin America,” with Pablo Garriga and Andres Zambrano.