International Provision of Trade Services, Trade, and Fragmentation
AbstractThis paper examines the special role that trade liberalization in service industries can play in stimulating not only trade in services itself, but also in stimulating trade in goods. International trade in goods requires inputs from several services industries - what I call trade services, such as transportation, insurance, and finance - in order to complete and facilitate international transactions. Restriction on the ability of national service providers to provide these services across borders and within foreign countries create additional costs and barriers to international trade above those that would arise in otherwise comparable intra-national exchange. As a result, trade liberalization in services can yield benefits, by facilitating trade in goods, that are larger than one might expect from analysis of the services trade alone. This paper explores this idea using simple theoretical models to specify the relationships between services trade and goods trade. The paper also, to make the point more forcefully, notes the role of services trade in a model of international industrial fragmentation, where production processes can be separated across locations but at some cost in terms of additional service inputs.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 9 (2001)
Issue (Month): 2 (May)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
Other versions of this item:
- Deardorff, Alan V., 2001. "International provision of trade services, trade, and fragmentation," Policy Research Working Paper Series 2548, The World Bank.
- Deardorff, A.V., 2000. "International Provision of Trade Services, Trade, and Fragmentation," Working Papers, Research Seminar in International Economics, University of Michigan 463, Research Seminar in International Economics, University of Michigan.
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deardorff, A.V., 1998.
"Fragmentation in Simple Trade Models,"
Papers, Michigan - Center for Research on Economic & Social Theory
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- Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Working Papers, Research Seminar in International Economics, University of Michigan 422, Research Seminar in International Economics, University of Michigan.
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Policy Research Working Paper Series
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- Deardorff, A.V., 2000. "Financial Crisis, Trade, and Fragmentation," Working Papers, Research Seminar in International Economics, University of Michigan 458, Research Seminar in International Economics, University of Michigan.
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- David Hummels & Dana Rapoport & Kei-Mu Yi, 1998. "Vertical specialization and the changing nature of world trade," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Jun, pages 79-99.
- Deardorff, A.V. & Stern, R.M., 2000. "What the Public Should Know about Globalization and the World Trade Organization," Working Papers, Research Seminar in International Economics, University of Michigan 460, Research Seminar in International Economics, University of Michigan.
- Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 8(1), pages 71-79.
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