Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77454
Authors: 
Bombarda, Pamela
Gamberoni, Elisa
Year of Publication: 
2008
Series/Report no.: 
HEID Working Paper 09/2008
Abstract: 
We analyse the impact of relaxing rules of origin (ROOs) in a simple setting with heterogeneous firms that buy intermediate inputs from domestic and foreign sources. In particular, we consider the impact of switching from bilateral to diagonal cumulation when using preferences (instead of paying the MFN tariff) involving the respect of rules of origin. We find that relaxing the restrictiveness of the ROOs leads the least productive exporters to stop exporting. The empirical part confirms these results. We use the most recent techniques developed by Helpman, Melitz and Rubinstein (2007) on highly disaggregated data (HS6 digit) to analyse the effects of the introduction of the Pan-European Cumulation System (PECS). We find that PECS reverses the negative impact of strict ROOs on intermediate trade which turns positive as a consequence of introducing diagonal rules of cumulation (ROCs).
Subjects: 
Intermediate goods
Rules of origin
Rules of cumulation
Firm heterogeneity
Gravity
JEL: 
F12
F13
F14
F15
Document Type: 
Working Paper

Files in This Item:
File
Size
341.62 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.