Information Cost: A Prior Hurdle to Exporting
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This paper empirically investigates how information cost, as part of trade costs, affects the decision of an individual firm to export. We use cross section firm-level data to examine how the difficulty of obtaining information on technical regulations in the European Union (EU) and the United States actually reduces firm incentives to export to these two destinations. Results suggest that increased information cost significantly reduces the probability of exporting for an individual firm, beyond tariff and other nontariff barriers.