Implications of non‐tariff measures on international business operations: a case of India's textiles and clothing firms

Implications of non‐tariff measures on international business operations: a case of India's... Purpose – This paper attempts to examine the implications of non‐tariff measures (NTMs) on firms' international business operations through a survey of India's textiles and clothing exporting firms. The main objectives of the study are to identify and assess the impact of NTMs, and analyze the cost incurred in complying with them. Design/methodology/approach – This paper is based on the survey which was jointly undertaken with the Market Research Division of Textiles Committee, Mumbai. Findings – The results reveal that the EU and USA‐based buyers are more restrictive with significantly higher NTM incidences. The technical barriers, product and production process standards, and conformity assessment requirement for technical barriers are the widely used NTM categories. The compliance expenditure may vary according to firm size, and an inverse relation is revealed by this study. The larger and smaller firms demonstrate important differences in compliance due to their varying resource endowments. Further, the regression results suggest that the US and EU markets and firms' product profile/type are an important determinant of compliance cost. Originality/value – This study contributes to the understanding about the implications of NTMs on Indian firms, and the inferences may be tested in other similar Asian markets. However, a further empirical validation of the issues such as NTMs as promotion and marketing tools is warranted. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Asia Business Studies Emerald Publishing

Implications of non‐tariff measures on international business operations: a case of India's textiles and clothing firms

Journal of Asia Business Studies, Volume 5 (2): 21 – Jul 26, 2011

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1558-7894
D.O.I.
10.1108/15587891111152357
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper attempts to examine the implications of non‐tariff measures (NTMs) on firms' international business operations through a survey of India's textiles and clothing exporting firms. The main objectives of the study are to identify and assess the impact of NTMs, and analyze the cost incurred in complying with them. Design/methodology/approach – This paper is based on the survey which was jointly undertaken with the Market Research Division of Textiles Committee, Mumbai. Findings – The results reveal that the EU and USA‐based buyers are more restrictive with significantly higher NTM incidences. The technical barriers, product and production process standards, and conformity assessment requirement for technical barriers are the widely used NTM categories. The compliance expenditure may vary according to firm size, and an inverse relation is revealed by this study. The larger and smaller firms demonstrate important differences in compliance due to their varying resource endowments. Further, the regression results suggest that the US and EU markets and firms' product profile/type are an important determinant of compliance cost. Originality/value – This study contributes to the understanding about the implications of NTMs on Indian firms, and the inferences may be tested in other similar Asian markets. However, a further empirical validation of the issues such as NTMs as promotion and marketing tools is warranted.

Journal

Journal of Asia Business StudiesEmerald Publishing

Published: Jul 26, 2011

Keywords: International business; Non‐tariff measures; Non‐tariff barriers; Cost of compliance; Textiles; Clothing

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