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Trade Obstacles, Inventory Level of Inputs, and Internationalization of Enterprise Activities: A Comparison between Southeast Asia and Latin America

Discussion Papers


August 2014


This paper investigates the impact of trade barriers such as customs clearance, subjective trade obstacles (customs and trade regulations), and inventory of inputs on the internationalization of enterprises in Southeast Asia and Latin America, using the World Bank’s enterprise surveys. Empirical results show a negative association between the internationalization of enterprises and subjective trade obstacles, while the impact of subjective trade obstacles is not significant on enterprises already internationalized. An international comparison between Southeast Asia and Latin America suggests that enterprises in Latin America face unfavorable conditions that discourage them from becoming more closely inserted into international production networks.

Keywords: export propensity, export intensity, trade cost, inventory control, Southeast Asia, Latin America

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