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What are the determinants of international trade in services? Evidence from firm-level data for Poland

Author

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  • Łukasz Matuszczak

    (Narodowy Bank Polski; e-mail: lukasz.matuszczak@nbp.pl; University of Warsaw, Chair of Macroeconomics and International Trade Theory)

Abstract

In this paper, we investigate the determinants of firm-level services export performance. Our focus is on three main aspects affecting services export: international capital linkages (FDI relationships), the existence of trade barriers, the demand and supply factors. The estimated models of the export performance include product and firm-level controls, such as foreign demand, firm-level imports, merchandise exporter status and foreign ownership, as well as destination fixed effects, product fixed effects, firm-level fixed effects. We used the Services Trade Restrictiveness Index (STRI) as a proxy to control for institutional trading barriers. The results suggest export-augmenting effects in services caused by both foreign ownership and involvement in merchandise trade. Restrictions on international services market turned out to be significant as well. As far as the heterogeneity of firms is concerned, size of firms, industry and gravity variables such as GDP of trade-partner, distance and common border have a significant impact on export. The study uses a unique firm-level dataset providing detailed information on services exports for 2010–2015. In contrast to modern studies based on a random sample of firms, we used the entire population of services exporters in Poland.

Suggested Citation

  • Łukasz Matuszczak, 2020. "What are the determinants of international trade in services? Evidence from firm-level data for Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 51(2), pages 143-166.
    • Handle: RePEc:nbp:nbpbik:v:51:y:2020:i:2:p:143-166
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    More about this item

    Keywords

    firm heterogeneity; services trade; FDI in services; trade barriers; determinants of exports;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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