The effects of trade cost components and uncertainty of time delay on bilateral export growth

This paper measures the trends, specifically for exporters, in bilateral trade costs and more specifically for costs associated with policy barriers. The study further examines the effects of different trade cost components on bilateral export flows via the dynamic panel gravity model. Empirical evidence shows that trade costs generally have a declining trend globally, however, in the case of emerging countries, this rate of decline is very low. The costs associated with non-tariff barriers in emerging countries have a greater role in the continuation of higher trade costs, in comparison to tariff barriers' costs. Likewise, the two-steps system GMM model's results suggest that the infrastructure quality, transportation costs, volatility of exchange rate, and uncertainty in time (days) delay are major hurdles in the sustainable growth of exports and indeed have rendered the exports uncompetitive in the world market, those are also sturdily supported by the prediction of the theory.