Hiau Looi Kee is a Lead Economist with the Trade Team of the World Bank Research Department. Her research focuses on trade and productivity growth at the firm and aggregate levels. Her current projects include studying the global value chains and domestic value added in exports, large scale estimations of trade policy measurements in terms of import demand elasticities, ad valorem equivalent of non-tariff measures and trade restrictiveness indexes. Her work has been published in top general interests and field journals, such as the American Economic Review, Review of Economics and Statistics and the Journal of International Economics. She has a Ph.D. in economics from the University of California at Davis.
Journal of International Economics, September 2022
Similar to tariffs, non-tariff measures (NTMs) may induce trade fraud when they are restrictive. This paper examines whether discrepancies observed in the official trade statistics of importing and exporting countries are partly due to trade fraud from evading border NTMs. To capture the restrictiveness of NTMs, this paper estimates the ad valorem equivalent (AVE) with importer-exporter-product variations. This paper presents a theoretical model and empirical evidence showing that discrepancies increase with AVEs, consistent with the trade fraud due to traders intentionally misdeclaring countries of origin or misclassify products in order to evade border NTMs. The results are driven by homogeneous products and the trade between developed and developing countries.
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