We do not find any impact of the imposition of NTMs on the extensive margin, whether across all sectors or specifically within the agriculture and manufacturing sectors. Theoretically, the decision to enter or exit a product-destination market depends on the trade cost and quality effect of the imposition of standards. The anticipated higher profits resulting from a heightened demand due to the quality standards could incentivize firms to enter or remain in the market (Schmidt and Steingress, 2022) while the increased fixed costs could induce market exit for firms that produce lower-quality products, and deter potential new exporters from exporting to the destination (Melitz, 2003). Our empirical findings, therefore, suggest that these two forces nullify each other.

Table 2: The effect of non-tariff measures on firm-level margins of trade

||Extensive|margins|||||Intensiv|e margin||
|---|---|---|---|---|---|---|---|---|---|
|_Outcome:_|Export En|try Dumm|y|Export Ex|it Dummy||Export V|alue (logs|)|
||All|Agric.|Manuf.|All|Agric.|Manuf.|All|Agric.|Manuf.|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|
|log _NTMpcdt_|0.000|0.001|_−_0.000|_−_0.000|0.000|_−_0.001|_−_0.070<sup>_∗_</sup>|_−_0.166<sup>_∗_</sup>|_−_0.125<sup>_∗∗_</sup>|
||(0.001)|(0.002)|(0.001)|(0.001)|(0.002)|(0.001)|(0.041)|(0.085)|(0.063)|
|log _Tari f fpcdt_|_−_0.000|_−_0.000|_−_0.000<sup>_∗∗_</sup>|_−_0.000|_−_0.000|_−_0.000<sup>_∗_</sup>|0.012|0.035|_−_0.019|
||(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.016)|(0.033)|(0.015)|
|Observations<br>|1,319,162|403,212|915,479|1,392,332|425,985|965,843|101,379|39,502|61,265|
|Adjusted _R_<sup>2</sup>|0.217|0.202|0.227|0.210|0.191|0.220|0.631|0.542|0.646|

Notes: “All” denotes all sectors, “Agric.” denotes the agriculture and food sectors, while “Manuf.” indicates the Manufacturing sector. Robust standard errors clustered at the origin-destination-product level are in parentheses. ***, ** and * denote significance at 1%, 5%, and 10%. All models include controls for firm-origin-product, firm-product-year and destination-year fixed effects, which are excluded from the table for brevity.

On the other hand, we find a negative and statistically significant effect of NTMs on the intensive margin. For all sectors, a 1% increase in the number of NTMs imposed on an HS6 product decreases the value of firm-level exports by 0.07% (column 7). This negative effect is particularly pronounced in the agriculture sector compared to the manufacturing sector, with elasticities of approximately _−_ 0.16% and _−_ 0.13%, respectively (columns 8 and 9). This finding confirms that of Fontagné et al. (2015) and Curzi et al. (2020) who found a negative impact of standards on the intensive margin. As previously discussed in section 2, the effect of NTMs on the intensive margin remains theoretically unclear and thus an empirical question. A rise in trade costs could potentially diminish the value of firm-level exports, yet it might also prompt marginal exporters to withdraw from the market. Therefore, the negative effect on the intensive margin could stem from the absence of any observable impact of NTMs on the probability of exit. This suggests that NTMs serve as a variable trade cost in our context and affect the intensive margin negatively. 0ur finding that the negative effect is more pronounced in the agriculture sector than in the manufacturing sector is consistent with the existing literature (e.g., Li and Beghin, 2012; Bacchetta and Beverelli, 2012), suggesting that adaptation costs are relatively lower in the manufacturing sector compared to the agriculture sector.

In all cases, we observe that ad-valorem tariffs have no statistically significant effects on the different margins of export adjustment. Globally tariffs have been on a decline (see Figure 4), 13