Patterns of regulatory heterogeneity in international trade: Intensity, coverage, and structure

Abstract

With falling tariffs the role of regulatory heterogeneity in international trade has become central in recent debates about regional integration and trade costs. In describing the NTM incidence few studies explicitly take into account the specific nature of underlying regulatory differences. We propose distinguishing regulatory heterogeneity with respect to the intensity, coverage, and structure of regulations, and present indicators reflecting each one of these dimensions. Enabled by detailed product‐level regulatory data based on coded reviews of national legislation, we illustrate the different channels of regulatory heterogeneity on the country‐ and sector‐level. The findings motivate a separate treatment of the different heterogeneity dimensions in the assessment of non‐tariff measures in international trade.