The constraint about the input's origination in the production's process is still an undiscovered land. There are several articles discussing the Rules of Origin's (RoO) effects over the value added produced by the Developing Countries (DC), but none of them produces a solid method with which the research can move forward in understanding the RoO's over the DCs.
The aim of this research project is to add an empirical evidence of this regulation, providing also a dataset able to describe the effects of it. The data preferred is based upon a priced-based approach, which consists of estimating the price of products in the Non-Tariff Measures' presence with that of similar products on markets without it (Cadot & Gourdon, 2016). This kind of dataset is made by the Centre d¿Etudes Prospectives et d¿Informations Internationales (CEPII).
Nowadays, the literature studying the trade effects mainly implements models over value added observations in order to differentiate the several components of exports, in compliance with the workstream started by Wang et al. (2013), which augmented the decomposition of Leontief (1936). This decomposition allows us to infer over several components exports and imports that take place inside the process of the Global Value Chain (GVC), process which involves almost all the goods traded among the world's countries.
However, there is not a solid theoretical background upon which building our empirical research. Before trying to assess the effects of RoO on the DCs, it is needed to contextualise the relationship existing between RoO and other economic agents and/or elements, that can be labour, or capital, productivity, Foreign Direct Investments (FDI), labour, or inputs, demand. The research will be also focused on finding a proper theoretical background needed to tell the story about the effects of the RoO on the DCs.
The project is aimed at estimating the effect of the EU's Rules of Origin on the Development countries. The literature is not unambiguous on this topic. The step this project wishes to take is to give a proper dataset useful to analyse this important issue for DCs and also to provide further research on the matter.
Moreover, this project wishes to provide a proper theoretical framework on the effect of RoO, so to understand the analysis dimension. At the best of our knowledge, it is the first attempt to build a theory on the effect of RoO. Literature shows attempts on building theoretical framework on the firms' position in the Global Value Chains (Balié, Del Prete, Magrini, Montalbano, & Nenci, 2017), but how RoO enters in this framework is everything but defined.