Trade Facilitation and the Extensive Margin of Exports

This paper examines the link between trade facilitation and export variety for a broad cross-section of countries. We measure trade facilitation using port efficiency. We also include the bilateral import tariff and OECD membership and regional trade agreements. We find that port efficiency contributes significantly to the extensive margin of exports, and that the bilateral import tariff negatively impacts the variety of exports. The positive effect is confirmed when examining trade between countries without common land borders, or between OECD member countries and non-OECD countries. Results are not as strong when we look at within-OECD trade, or focus on bilateral trade in the intensive margin.