A Model of Trade Liberalization in Services
AbstractThis paper develops an intra-industry service trade model taking into account important features of services. We find that service trade liberalization between identical economies is welfare enhancing when the pre-trade domestic market liberalization is limited. This holds regardless of the degree of trade liberalization and of the mode of supply. However, if the pre-trade environment is characterized by a free-entry equilibrium, then service trade liberalization is not necessarily welfare improving. It is welfare enhancing if the trade liberalization is full and the mode of supply is cross-border. The gain from trade in our model comes from the improvement in service quality-better matching between consumers' ideal varieties and firms' product specificity. The implications for the mode of supply in service trade are also explored. Copyright � 2006 The Authors; Journal compilation � Blackwell Publishing Ltd. 2006.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 14 (2006)
Issue (Month): 1 (02)
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- Ishikawa, Jota & Morita, Hodaka & Mukunoki, Hiroshi, 2008.
"FDI in Post-Production Services and Product Market Competition,"
CCES Discussion Paper Series
1, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
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- Ishikawa, Jota & Morita, Hodaka & Mukunoki, Hiroshi, 2010. "FDI in Post-Production Services and Product Market Competition," CCES Discussion Paper Series 29, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
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- Broussolle Damien, 2012. "A Note on the Links Between Manufacturing, Goods and Services Exports," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(Special N), pages 600-620, November.
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