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Working Paper

Does Input Tariff Reduction Impact Firms Exports in the Presence of Import Tariff Exemption Regimes?

TARIFFS PRODUCER PRICE INDEX EXPORT MARKETS TRADE EFFECT FREE TRADE AGREEMENT WORLD TRADE ORGANIZATION PRODUCTION SUNK COSTS IMPORT REGIMES TRADE POLICY REVIEW CHEMICAL MARGINAL COST INDUSTRY EXPORT PERFORMANCE IMPORT TARIFF SUPPLIER BALANCE OF PAYMENTS GROWTH VOLATILITY EXPORTS DOMESTIC MARKET EXPORTERS EXPORT PRICES TRADE ZONE INCENTIVES ECONOMIC POLICY EQUILIBRIUM DISTRIBUTION VARIABLES TRADE REFORMS SPECIAL REGIMES TRADE OPENNESS PRICE INPUTS LOBBYING PAYMENTS INPUT PRICES FREE TRADE TRENDS TRADE AGREEMENTS FREE TRADE ZONES TRADE REGULATIONS FOREIGN MARKETS CUSTOMS DUTIES PREFERENTIAL TRADE AGREEMENTS FOREIGN TRADE EQUILIBRIUM THEORY DEVELOPMENT ECONOMICS FOREIGN SUPPLIERS PRIMARY FACTORS DOMESTIC INPUTS TEXTILE INDUSTRY TARIFF REDUCTION CUSTOMS PRODUCTS SPECIALIZATION ECONOMETRICS PRODUCTIVITY FREE TRADE ZONE MARKETS WTO BALANCE OF PAYMENTS CRISES ACCESS TRADE MODELS INTERNATIONAL ECONOMICS RESEARCH IMPORTS TRADE POLICY PRODUCT TRADE AGREEMENT EXPORT MARKET TAXES EXPORT VALUE EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM CONSUMPTION UNILATERAL TRADE ECONOMIC PERFORMANCE INTERNATIONAL TRADE VOLATILITY VALUE COMPETITIVENESS PRODUCER PRICE PRODUCTION FUNCTIONS IMPORT VALUES CUSTOMS REGULATIONS DEMAND INTERMEDIATE GOODS TRADE AREA TRADE REGIMES OPENNESS MARKET TRADE LIBERALIZATION ENDOGENOUS VARIABLES PRODUCTION FUNCTION CLOSED ECONOMY CAPITAL GOODS AVERAGE TARIFF TRADE VALUE TRADE ZONES TRADE GDP TRADE PARTNERS GOODS THEORY GENERAL EQUILIBRIUM ANALYSIS FREE ZONE INPUT TRADE ECONOMIC CRISIS PREFERENTIAL TRADE TARIFF IMPORT REGIME TRADE LIBERALIZATION PROCESS FREE TRADE AREA TRADE PARTNER WORLD TRADE UNILATERAL TRADE LIBERALIZATION DUTY DRAWBACKS MOST FAVORED NATION WHOLESALERS SUPPLIERS INTERMEDIATE INPUTS PRICE INDEX OUTCOMES IMPORT DUTIES IMPORT DUTY IMPORT VALUE TRADE REGIME EXPORT SHARE PRICES VALUE OF EXPORTS DEVELOPMENT POLICY CUSTOMS REGIME
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World Bank, Washington, DC
Middle East and North Africa | Morocco
2015-05-04T16:19:57Z | 2015-05-04T16:19:57Z | 2015-04

In the last decade Morocco undertook substantial, if gradual, trade liberalization by reducing tariffs, reforming trade regulations and signing free and preferential trade agreements with several regions and countries, including the United States, Turkey, the European Union and Arab countries. This paper analyzes the impact of input tariff reduction on Moroccan exporting firms through the channel of intermediate goods. Gaining access to more varied and cheaper inputs can make exporting firms more competitive, and as a result they export more. To evaluate how this policy may impact firms export performance, the paper analyzes the impact of input tariff reduction on different margins of trade with emphasis on export markets and product diversification. The identification of the effect of input tariffs on exports relies on a difference-in-difference estimator using heterogeneous access to import tariff exemption as a measure of different levels of exposure to input tariff reduction at the firm level. Overall, the analysis finds that firms that are relatively more exposed to input tariff perform better in those sectors with the largest input tariff reduction, with better access to markets, higher probability to survive when exporting new products in those sectors and higher export value growth.

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