IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v35y2012i11p1530-1558.html
   My bibliography  Save this article

Trade in Services and TFP: The Role of Regulation

Author

Listed:
  • Erik van der Marel

Abstract

What determines services TFP: Is it services trade or services‐trade regulation? To respond to this question I use four indicators of international trade in services since 1990 to 2005 – namely FDI inward stock, services imports, domestic sales of foreign affiliates (FATS) and FDI inflows – to examine what type of services trade directly affects services TFP. Such analysis is done both for the level and growth rate of TFP in each of the 14 selected services sectors. Subsequently, we analyze what type of sector‐specific regulation with respect to each of the four indicators of services trade has played an inhibiting effect on both the level and growth of services TFP. Such analysis contrasts with former studies in which mainly factor inputs and economy‐wide regulatory variables are used to explain services TFP. We provide evidence that services trade has a direct effect on the level of services TFP, but this effect is inhibited as soon as the regulatory variables are included. As for services TFP growth, we find that neither trade nor entry barriers are robust determinants to explain cross‐country differences over time. Instead, regulation on operational procedures affecting the variables costs structure of the firm play a much more important role in explaining TFP growth between countries.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Erik van der Marel, 2012. "Trade in Services and TFP: The Role of Regulation," The World Economy, Wiley Blackwell, vol. 35(11), pages 1530-1558, November.
  • Handle: RePEc:bla:worlde:v:35:y:2012:i:11:p:1530-1558
    DOI: twec.12004
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/twec.12004
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/twec.12004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Barry P. Bosworth & Jack E. Triplett, 2003. "Productivity measurement issues in services industries: \\"Baumol's disease\\" has been cured," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 23-33.
    2. Bernard Hoekman & Aaditya Mattoo & André Sapir, 2007. "The political economy of services trade liberalization: a case for international regulatory cooperation?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(3), pages 367-391, Autumn.
    3. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    4. repec:dgr:rugccs:200311 is not listed on IDEAS
    5. Ark, Bart van & Inklaar, Robert & McGuckin, Robert H., 2003. "ICT and productivity in Europe and the United States," CCSO Working Papers 200311, University of Groningen, CCSO Centre for Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series wp-2017-31, World Institute for Development Economic Research (UNU-WIDER).
    2. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    3. MORIKAWA Masayuki, 2015. "Service Trade and Productivity: Firm-level evidence from Japan," Discussion papers 15030, Research Institute of Economy, Trade and Industry (RIETI).
    4. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.
    5. Mironov, Valeriy V. & Petronevich, Anna V., 2015. "Discovering the signs of Dutch disease in Russia," Resources Policy, Elsevier, vol. 46(P2), pages 97-112.
    6. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.
    7. Arti Grover Goswami & Sebastián Sáez, 2014. "Trade in services competitiveness: An assessment methodology," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-31.
    8. World Bank, 2016. "Assessing the Impact of WTO Accession on Belarus," World Bank Publications - Reports 24698, The World Bank Group.
    9. Van Der Marel,Erik Leendert & Shepherd,Ben, 2020. "Trade Facilitation in Services : Concepts and Empirical Importance," Policy Research Working Paper Series 9234, The World Bank.
    10. ONOSE, Okpeku Lilian & Aras, Osman Nuri, 2021. "Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?," MPRA Paper 108350, University Library of Munich, Germany.
    11. Li, Hao & Han, Jian & Xu, Yayun, 2023. "The effect of the digital economy on services exports competitiveness and ternary margins," Telecommunications Policy, Elsevier, vol. 47(7).
    12. World Bank Group, 2014. "Cambodia Services Trade : Performance and Regulatory Framework Assessment," World Bank Publications - Reports 20759, The World Bank Group.
    13. Miroudot, Sébastien & Sauvage, Jehan & Shepherd, Ben, 2012. "Trade costs and productivity in services sectors," Economics Letters, Elsevier, vol. 114(1), pages 36-38.
    14. ADACHI Yusuke & OGAWA Hikaru & TSUBUKU Masafumi, 2019. "Productivity Dynamics during Major Crises in Japan: A Quantile Approach," Discussion papers 19015, Research Institute of Economy, Trade and Industry (RIETI).
    15. Xiaoli Hao & Xinhui Wang & Haitao Wu & Yu Hao, 2023. "Path to sustainable development: Does digital economy matter in manufacturing green total factor productivity?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 360-378, February.
    16. Roy, Martin, 2017. "The contribution of services trade policies to connectivity in the context of aid for trade," WTO Staff Working Papers ERSD-2017-12, World Trade Organization (WTO), Economic Research and Statistics Division.
    17. Mironov, V.V. & Petronevich, A.V., 2015. "Discovering the signs of Dutch disease in Russia," BOFIT Discussion Papers 3/2015, Bank of Finland Institute for Emerging Economies (BOFIT).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jens Matthias Arnold & Beata Javorcik & Molly Lipscomb & Aaditya Mattoo, 2016. "Services Reform and Manufacturing Performance: Evidence from India," Economic Journal, Royal Economic Society, vol. 126(590), pages 1-39, February.
    2. repec:ilo:ilowps:366690 is not listed on IDEAS
    3. Marius Gavriletea, 2008. "The Effects Of Terrorism On The Insurance Sector," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    4. Robert Rowthorn & Ken Coutts, 2004. "De-industrialisation and the balance of payments in advanced economies," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 767-790, September.
    5. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    6. Marina Rybalka, 2015. "The innovative input mix. Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services," Discussion Papers 801, Statistics Norway, Research Department.
    7. Anna M. Ferragina & Giulia Nunziante, 2018. "Are Italian firms performances influenced by innovation of domestic and foreign firms nearby in space and sectors?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 335-360, September.
    8. Ajit Singh, 2003. "Capital account liberalisation, free long-term capital flows, financial crises and economic development," Chapters, in: Philip Arestis & Michelle Baddeley & John S.L. McCombie (ed.), Globalisation, Regionalism and Economic Activity, chapter 1, pages 15-46, Edward Elgar Publishing.
    9. Massimo Colombo & Annalisa Croce & Samuele Murtinu, 2014. "Ownership structure, horizontal agency costs and the performance of high-tech entrepreneurial firms," Small Business Economics, Springer, vol. 42(2), pages 265-282, February.
    10. Canh Nguyen & Minh Le & Khoa Cai & Michel Simioni, 2021. "Technical efficiency of Vietnamese manufacturing firms: do FDI spillovers matter?," Post-Print hal-03145499, HAL.
    11. Greenaway, David & Görg, Holger, 2002. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?," CEPR Discussion Papers 3485, C.E.P.R. Discussion Papers.
    12. Sanjaya Malik, 2015. "Conditional technology spillovers from foreign direct investment: evidence from Indian manufacturing industries," Journal of Productivity Analysis, Springer, vol. 43(2), pages 183-198, April.
    13. Reis, Anabela & Heitor, Manuel & Amaral, Miguel & Mendonça, Joana, 2016. "Revisiting industrial policy: Lessons learned from the establishment of an automotive OEM in Portugal," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 195-205.
    14. Andreja Benkovic & Juan Felipe Mejía, 2008. "Tourism as a driver of economic development: The Colombian experience," Documentos de Trabajo CIEF 10630, Universidad EAFIT.
    15. Blomström, Magnus & Kokko, Ari, 2003. "Human Capital and Inward FDI," CEPR Discussion Papers 3762, C.E.P.R. Discussion Papers.
    16. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    17. Maria Cipollina & Giorgia Giovannetti & Filomena Pietrovito & Alberto F. Pozzolo, 2012. "FDI and Growth: What Cross-country Industry Data Say," The World Economy, Wiley Blackwell, vol. 35(11), pages 1599-1629, November.
    18. Ozturk, Ilhan & Kalyoncu, Huseyin, 2007. "Foreign Direct Investment and Growth: An Empirical Investigation based on Cross-Country Comparison," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(1), pages 75-81.
    19. Sourafel Girma & Yundan Gong & Holger Görg, 2016. "Foreign Direct Investment, Access to Finance, and Innovation Activity in Chinese Enterprises," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 5, pages 79-94, World Scientific Publishing Co. Pte. Ltd..
    20. Philipp Harms & Pierre-Guillaume Méon, 2013. "The Growth Effects of Greenfield Investment and Mergers and Acquisitions: Econometric Investigation and Implication for MENA Countries," Working Papers 794, Economic Research Forum, revised Nov 2013.
    21. Bitzer, Jürgen & Kerekes, Monika, 2008. "Does foreign direct investment transfer technology across borders? New evidence," Economics Letters, Elsevier, vol. 100(3), pages 355-358, September.

    More about this item

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:35:y:2012:i:11:p:1530-1558. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.