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The free movement of services within the EU

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Author Info
Henk Kox ()
Arjan Lejour ()
Raymond Montizaan

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Abstract

Intra-European trade in services is hampered by national regulatory differences for service markets. The European Commission has proposed a new directive to overcome these regulatory barriers. This document assesses the effects of this new directive on trade and investment in services.

We have developed an index for bilateral heterogeneity in product-market regulation, and apply it to the OECD Regulation Database. We show that the heterogeneity in regulation hampers bilateral service trade in the EU, and also bilateral direct investment. We investigate how the proposed EU directive could lower the intra-EU heterogeneity in product market regulation for services, and what effect this would have on bilateral trade and investment in the Internal Market for services.

We find that commercial services trade in the EU might increase by 15-30%, while the foreign direct investment stock in services might rise by 20-35%.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Documents with number 69.

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Date of creation: Oct 2004
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Handle: RePEc:cpb:docmnt:69

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Related research
Keywords: EU; internal market; services; service trade; direct investment; regulatory barriers; gravity model;

Other versions of this item:

Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F15 - International Economics - - Trade - - - Economic Integration
F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
L5 - Industrial Organization - - Regulation and Industrial Policy
L8 - Industrial Organization - - Industry Studies: Services

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References listed on IDEAS
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.:
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  5. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," NBER Working Papers 8724, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. David L. Carr & James R. Markusen & Keith E. Maskus, 2001. "Estimating the Knowledge-Capital Model of the Multinational Enterprise," American Economic Review, American Economic Association, vol. 91(3), pages 693-708, June. [Downloadable!] (restricted)
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  7. Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages F723-39, November. [Downloadable!] (restricted)
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  10. Henri L.F. De Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," ERSA conference papers ersa03p421, European Regional Science Association. [Downloadable!]
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  11. Stephen S. Golub, 2003. "Measures Of Restrictions on Inward Foreign Direct Investment for OECD Countries," OECD Economics Department Working Papers 357, OECD, Economics Department. [Downloadable!]
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  13. Giuseppe Nicoletti & Steve Golub & Dana Hajkova & Daniel Mirza & Kwang-Yeol Yoo, 2003. "Policies and International Integration: Influences on Trade and Foreign Direct Investment," OECD Economics Department Working Papers 359, OECD, Economics Department. [Downloadable!]
  14. Henk Kox & Arjan Lejour & Raymond Montizaan, 2004. "Intra-EU trade and investment in service sectors, and regulation patterns," CPB Memoranda 102, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
    Other versions:
  15. Giuseppe Nicoletti, 2001. "Regulation in Services: OECD Patterns and Economic Implications," OECD Economics Department Working Papers 287, OECD, Economics Department. [Downloadable!]
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  19. Bruce Blonigen & KaSaundra Tomlin & Wesley Wilson, 2004. "Tariff-jumping FDI and domestic firms' profits," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 656-677, August. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, 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.)

  1. Kox, Henk L.M. & Nordås, Hildegunn Kyvik, 2007. "Services trade and domestic regulation," MPRA Paper 2116, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Henk Kox & Arjan Lejour, 2005. "Regulatory heterogeneity as obstacle for international services trade," CPB Discussion Papers 49, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  3. Wolf Schäfer, 2008. "Dienstleistungsökonomie in Europa," Working Papers 004, Hanseatic University, Germany, Department of Economics. [Downloadable!]
  4. Gelauff, George & Lejour, Arjan, 2006. "The new Lisbon Strategy: An estiamtion of the impact of reaching 5 Lisbon targets," MPRA Paper 16168, University Library of Munich, Germany. [Downloadable!]
  5. Arjan Lejour & Paul Veenendaal & Gerard Verweij & Nico van Leeuwen, 2006. "Worldscan; a model for international economic policy analysis," CPB Documents 111, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Laura Thissen & Sjef Ederveen, 2006. "Higher education: Time for coordination on a European level?," CPB Discussion Papers 68, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  7. Oscar Bajo-Rubio & Antonio G. Gómez-Plana, . "Simulating the effects of the European single market: a CGE analysis for Spain," Studies on the Spanish Economy 208, FEDEA. [Downloadable!]
    Other versions:
  8. Henk Kox & Arjan Lejour, 2005. "Liberalisation of the European services market and its impact on Switzerland," CPB Memoranda 130, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  9. Michele Cincera, 2005. "L’importance et l’étendue des barrières légales et administratives dans le cadre de la directive « Bolkestein » : une analyse comparative entre la Belgique et ses principaux partenaires comme," Working Papers DULBEA 05-11.RR, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
    Other versions:
  10. Nico van Leeuwen & Arjan Lejour, 2006. "Bilateral Services Trade Data and the GTAP database," CPB Memoranda 160, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  11. Roland de Bruijn & Henk Kox & Arjan Lejour, 2006. "The trade-induced effects of the Services Directive and the country of origin principle," CPB Documents 108, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  12. Arjan Lejour & J.W. de Paiva Verheijden, 2004. "Services trade within Canada and the European Union. What do they have in common?," CPB Discussion Papers 42, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  13. Juergen Janger, 2005. "Sectoral Regulation in Austria before and after EU Accession — The Network Industries as a Case in Point," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 178-195, August. [Downloadable!]
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