SSE/EFI Working Paper Series in Economics and Finance 455
This paper analyses the effects of non-tariff barriers, in terms of both variable and fixed export costs, on trade structure. The relationship between fixed and variable trade costs determines whether international trade emerges. If trade emerges, only variable, but not fixed export costs, influence the trade structure. The empirical results suggest that non-tariff barriers act, in particular, as fixed export costs, as the trade and intra-industry trade emerge in a larger number of industries than prior to the Single European Market programme, while the share of intra-industry trade is unaffected.