Using detailed data on veterinary, ecological, sanitary, phytosanitary and mandatory certification measures, this paper studies the effect of non-tariff measures (NTMs) on firm productivity in the food-processing industry through forward and backward linkages. Using quantity and value of output at product level, we calculate and compare quantity- and revenue-based measures of total factor productivity (TFP). Exploiting the episode of NTM liberalisation in Ukraine in 2008–2012, we find that NTMs on intermediate inputs have a negative effect on quantity-based TFP. Other trade policy variables, including input tariffs and output NTMs also negatively influence productivity. The effect on the revenue-based TFP is weaker due to price and quality adjustments. Interacting changes in input NTMs with import intensity prior to trade liberalisation, we find that firms that used imported inputs more intensively tend to have lower long-run TFP growth.
Bibliographical note© 2021 The Authors. Journal of Agricultural Economics published by John Wiley & Sons Ltd on behalf of Agricultural Economics Society
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Funding: This paper is written with financial support from ‘Non-tariff barriers, food safety and international food trade’, a joint project of Norwegian Institute of International Affairs (NUPI), University of Life Sciences and Kyiv School of Economics (KSE) funded by the Research Council of Norway (Contract no. 216742/O10).