Non-tariff measures (NTMs) have been an increasingly important trade policy tool. While they often absolve an important function to protect the consumers and the environment, they can also affect the competitiveness of firms. This paper contributes to the scant empirical evidence in this area by analyzing the effect of a number of specific NTMs on export activity of Indonesian firms. To that end, the analysis matches two unique datasets: one, a customs-level dataset on Indonesian firms' exports and imports and another on a novel time-varying dataset on NTMs at a highly disaggregated product level. Our results demonstrate that an increase in NTM exposure is associated with a negative impact on the survival time of firms in the export market, the number of products and markets they trade in, their entry into markets and their export values and quantities. NTMs have a more negative effect than tariffs in most cases. These results show that the impact of trade policy requires understanding of how individual firms will be affected by changes in policy. They can help policymakers to properly target export promotion activities, especially when policymakers are interested in export-led growth and diversification.
