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Estimating the Impact of Technical Barriers to Trade: The Case of Perfumes and Toilet Waters in Ecuador

Abstract:

This chapter discusses the effect of two technical barriers to trade (TBT) adopted by Ecuador in November 2013 on the import flows of perfumes and toilet waters. The study considers two TBTs: Resolution 116 and Resolution 093. In order to obtain an unbiased estimate, the study uses a synthetic control method combined with a difference-in-difference estimation. To the best of the authors’ knowledge, this is the first study that uses the synthetic control method to estimate the causal effect of a particular barrier to trade. In that sense, the contribution of this chapter is mainly methodological.