Non-tariff measures and productivity of Ukrainian food-processing firms
ukraine
trade-wars
firms
agrifood
non-tariff-measures
firm-level
Journal of Agricultural Economics, 2022. With Volodymyr Vakhitov, Veronika Movchan, and Mariia Panga.
Using detailed data on veterinary, ecological, sanitary, phytosanitary, and mandatory certification measures, we study how non-tariff measures affect firm productivity in Ukraine’s food-processing industry through forward and backward linkages, comparing quantity- and revenue-based measures of total factor productivity. Non-tariff measures on intermediate inputs reduce quantity-based productivity, and firms that rely heavily on imported inputs see the biggest long-run productivity losses when input requirements tighten; revenue-based effects are muted because firms adjust prices and quality instead.
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Using detailed data on veterinary, ecological, sanitary, phytosanitary, and mandatory certification measures, we study how non-tariff measures affect firm productivity in Ukraine’s food-processing industry through forward and backward linkages, comparing quantity- and revenue-based measures of total factor productivity. Non-tariff measures on intermediate inputs reduce quantity-based productivity, and firms that rely heavily on imported inputs see the biggest long-run productivity losses when input requirements tighten; revenue-based effects are muted because firms adjust prices and quality instead.
Non-tariff measures imposed by trading partners act as a quality filter on Ukrainian food-processing exporters: firms that clear them see productivity gains, while the compliance costs push less productive firms out of export markets entirely. Using firm-level microdata, we separate this selection effect from the direct within-firm productivity effect of meeting stricter standards — evidence directly relevant to Ukraine’s ongoing agrifood market access negotiations with the EU.
Published in: Journal of Agricultural Economics, 73(1), 234–256