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Winners and Losers of Services Liberalization

Author

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  • H.N. Thenuwara

    (University of Iowa, USA, and has served as an Assistant Governor of the Central Bank of Sri Lanka. Email: hennadige-thenuwara@uiowa.edu)

Abstract

In this research note, we develop a model of the services sector liberalization through Modes 3 and 4 where capital is brought to the home country. Foreign capital owners compete with domestic capital owners in producing services. Results in this research note show that domestic labour is better off with imported capital but domestic capital owners suffer. This could lead to domestic capital owners lobbying against the services liberalization via Modes 3 and 4.

Suggested Citation

  • H.N. Thenuwara, 2011. "Winners and Losers of Services Liberalization," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 12(2), pages 307-322, September.
    • Handle: RePEc:sae:soueco:v:12:y:2011:i:2:p:307-322
    DOI: 10.1177/139156141101200206
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    References listed on IDEAS

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    More about this item

    Keywords

    JEL: F11; JEL: F16; JEL: F21; Services liberalization; modes of services delivery; protection; complementarity of goods and services; foreign direct investment; compensation for labour; compensation for capital;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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