Free Paper with the Annotated Bibliography on Effects of Trade Barriers

Brown, Drusilla K., and Robert M. Stern. "Measurement and modeling of the economic effects of trade and investment barriers in services." Review of International Economics 9.2 (2001): 262-286.

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This is a research that measured and modeled economic effects of trade as well as well as investment barriers in the service industry. This is a very valuable source in my research on the effects of trade barriers as it adequately answers the research question. In this study, the researchers adapt the most recent edition of the "Michigan Model of World Production and Trade" to integrate foreign direct investment and cross-border services. Companies are assumed to be "monopolistically" competitive, and each manufactures commodities differentiated by the original research and development that defines the commodities. According to the authors, companies determine the production for local consumption or for export based on the type of barriers available. Normally, these companies incur fixed costs in the countries where they produce their products, and create optimal mark-up sales from each area of operations. The barriers to trade in the service industry include the extra expenses of employing variable capital as well as labor. In this research, the authors report the effects on economies of scale, sectoral output, activities of international businesses, factor prices, trade, as well as on welfare following start of national treatment of international businesses or companies across all nations. As shown in their discussions, trade barriers affect almost all aspects of the economy. Brown and Robert conclude that while the barriers to trade may come in various forms, their collective effects impacts the performance of trade.

Barbone, Luca. "Import barriers: an analysis of time-series cross-section data." OECD Economic Studies 11 (1988): 155-68.

This is a research that re-examines under-importing issues of all OECD nations by using pooled data collected over years. The author employs reviews latest literature and discusses trade barriers that affect importing of various countries. He also estimates how trade barriers reduced the import of commodities by these countries. The data the author analyzed are on manufacturing production, trade flows, as well as trade barriers. The barriers to trade focused on are mostly the natural ones such as transportation distance and cost. He also used the data on estimated transport cost and data on tariffs. Barbone obtained the data on nontariff barriers from UNCTAD. Although there is a huge difference between countries, the author generally concluded that the transport costs and tariffs were the most significant trade barriers in the manufacturing industry between the developed nations. The nontariff barriers came second. This research by Barbone is a valuable source to my research as it gives an analysis on forms of trade barriers as well as their effects on manufacturing and importation of goods among the developed countries. The author's discussion also provides an answer to may research question. According to the author's findings from the estimates of data, Japan had the highest trade barriers while the US had the lowest. Most of the data gathering and analysis was done with collaboration with other researchers; therefore the research is reliable. The data was also obtained from reliable sources and agencies.

Learner, Edward E. "Cross-section estimation of the effects of trade barriers." Empirical methods for international trade(1988): 51-82.

This is an empirical research on the effects of barriers to trade on international trade. In this research, Edward carefully puts together a theory that serves as the basis for pooling together data and information across commodities. The main presentation of this study is that "both the even and the uneven general equilibrium trade models tend to discourage the pooling of data across commodities." The author also presents a model of simple cross industry study of the effects of trade barriers. According to Edward, there is a negative relation between trade barriers and trade performance, which raises a concern about the significance of the inverse relations that the barriers are formulated as a reaction to undesirable trade performance. This is a valuable source for my research as it provides a cross commodity or cross industry effects of trade barriers on trade performance. Most studies of trade patterns are usually done on a nation-by-nation or on a commodity-by-commodity basis using the country or commodity consecutively as the unit of observation. In this empirical study, Edward concluded that cross commodity examination of trade barriers are based on murky grounds, and the barriers are instituted in response to trade outcomes. He also found that trade barriers and tariffs have negative effects on the performance of trade.

Lee, Jong-Wha, and Phillip Swagel. "Trade barriers and trade flows across countries and industries." Review of Economics and Statistics 79.3 (1997): 372-382.

This is a research by Lee and Phillip on the effects of barriers to trade on trade performance across industries and nations. In their research, the authors used raw data on trade barriers, production, as well as trade flows for forty-one nations collected in 1988. The researchers used the data to analyze economic as well as political determinants of nontariff barriers. They also used the same data to examine the effect of protection, both "tariff and nontariff" on trade flows. This research is reliable due to its scope and methodology, and it will be valuable in my current research on the effects of trade barriers. The various forms of barriers to trade and how they impact trade flows across industries and nations are discussed. Lee and Phillip used an "econometric framework" that enabled them to simultaneously determine trade barriers as well as trade flows. The final outcomes of this research are in line with political and economic suppositions of the determinants of protection. According to the authors, "even after accounting for industry and country specific factors, nations tend to protect industries that are weak, in decline, politically important, or threatened by import competition, but provide less protection to industries in which exports are important." Although some factors are specific to certain industries and countries, the extent at which the trade flow is affected by trade barriers appears to be relative.

Madsen, Jakob B. "Trade barriers and the collapse of world trade during the Great Depression." Southern Economic Journal (2001): 848-868.

This is an empirical research on the barriers of trade and their contribution to the collapse of world trade during the great depression. The research is a relevant and valuable source to my current research because it informs on the effects trade to barriers on the performance of trade. In this study, the author used a pane of data estimates of import and export equations during the period between the first and the Second World War. The author then estimated the effects of increasing "tariff and nontariff" trade barriers on the international trade between 1929 and 1932. Jacob's estimates shows that the actual world trade declined by about 14% as a result of shrinking income, 8% due to unrestricted increase in the rates of tariffs, 5% because of increases in tariffs caused by deflation, and another 6% as a result of enforcement of nontariff barriers. Based on these estimates, the effects of trade barriers on prices and income contributed equally with the unrestricted enforcement of trade barriers to the diminishing incomes and the ultimate collapse of world trade. Therefore, it can be concluded that both the tariff and nontariff barriers to trade played a major role in the collapse of international trade. Jacob underscores the importance of trade barriers as well as their effects. Other studies cited by the author have examined the impacts of trade barriers on incomes to give explanations of declining trade for individual nations.

Work Cited

Brown, Drusilla K., and Robert M. Stern. "Measurement and modeling of the economic effects of trade and investment barriers in services." Review of International Economics 9.2 (2001): 262-286.

Barbone, Luca. "Import barriers: an analysis of time-series cross-section data." OECD Economic Studies 11 (1988): 155-68.

Learner, Edward E. "Cross-section estimation of the effects of trade barriers." Empirical methods for international trade(1988): 51-82.

Lee, Jong-Wha, and Phillip Swagel. "Trade barriers and trade flows across countries and industries." Review of Economics and Statistics 79.3 (1997): 372-382.

Madsen, Jakob B. "Trade barriers and the collapse of world trade during the Great Depression." Southern Economic Journal (2001): 848-868.