Trade Facilitation and Firms: A Literature Review

Trade facilitation is a topic that has garnered a lot of interest and attention in the last few decades especially in light of the multilateral trading system of the World Trade Organization. However, while existing literature has generally approached the topic from a macroeconomic perspective, the effects of trade facilitation from a firm perspective have generally received less attention. This is regardless of the fact that firms and businesses are generally the main players in the international trade space. This paper thus sought to develop an understanding of the effects of trade facilitation on firms by conducting a literature review of existing research on the topic. Therefore, through the review of papers authored in a period of 21 years, it is established that research in this area of trade facilitation is still in its infancy. However, works done so far reveal that trade facilitation reduces the costs incurred by firms which in turn encourages firm productivity and diversification of export product offerings.