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Investigating the impacts of time delays on trade
Institution:1. Department of Applied Economics, University of Minnesota, United States;2. Departments of Applied Economics and Horticultural Science, University of Minnesota, United States;1. Cirugía General y Digestiva, Hospital Clínico Universitario de Santiago, Santiago de Compostela, La Coruña, España;2. Servicio de Anatomía Patológica, Hospital Clínico Universitario de Santiago, Santiago de Compostela, La Coruña, España;3. Servicio de Digestivo-Endoscopias, Hospital Clínico Universitario de Santiago, Santiago de Compostela, La Coruña, España;1. Faculty of Economics, Vietnam Maritime University, Viet Nam;2. Supply Chain Management and Social Responsibility, Hanken School of Economics, Finland;3. Bualuang ASEAN Chair Professor, Thammasat University, Thailand;4. Information Technology and Operations Management, Florida Atlantic University, USA
Abstract:Time delays due to inefficient customs and administrative procedures have become a leading non-tariff barrier (NTB) that restrict international trade and impair social welfare. This paper investigates how time delays affect product quality, product price, trade flow, and social welfare, using data on the days it takes to clear customs in 96 countries. We explore the impacts of time delays on product quality and price with different levels of perishability. We find that longer time delays at the border would significantly decrease highly perishable agricultural products' quality and price. We also find that for highly perishable agricultural products, improved and simplified customs delays would increase trade flows and social welfare of importing countries.
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