Year: 2024
Type: article
Abstract: This article investigates the international spillover effects of nondiscriminatory product regulations, for example, quality standards, in a multicountry general equilibrium framework with firm heterogeneity. In the presence of variable markups, when regulations are applied as a fixed cost consistent with stylized facts, they generate a positive spillover on the rest of the world as they induce entry of high‐quality firms and improve the terms of trade of the nonimposing countries. The benefits of such regulations are not fully realized under noncooperative policy settings, rationalizing international cooperation. We estimate our model to quantify the effects of regulations on various welfare‐relevant outcomes.
Source: International Economic Review
DOI: 10.1111/iere.12736
Authors: Luca Macedoni, Ariel Weinberger
Institutions: Aarhus University, George Washington University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4403202479