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The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data

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Abstract

In order to promote international trade in services, the WTO-GATS aims at progressively eliminating discriminatory regulations, which apply to foreign suppliers, byguaranteeing equal national treatment. This paper looks instead at the trade effect of domestic regulations, which apply to all firms indifferently and do not intend to exclude foreign suppliers. We propose a theory-based empirical test to determine whether or not these domestic regulations affect foreign suppliers more than local ones. We take this test to the data by using French firm-level exports of professional services to OECD countries. Our econometric results show that domestic regulations in the importing markets matter significantly for trade in services. They reduce both the decision to export and the individual exports. These results tend to prove that domestic regulations are de facto discriminatory even if they are not de jure.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2013/13019.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 13019.

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Length: 32 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:mse:cesdoc:13019

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Keywords: Trade in services; Domestic regulations; firm heterogeneity.;

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Cited by:
  1. Dincer, Nergiz & Tekin-Koru, Ayca, 2014. "A League of Their Own: Services Exporters within Goods Exporters," MPRA Paper 53294, University Library of Munich, Germany.
  2. Vaillant, Marcel, 2012. "How to encourage network trade rules interconnections? an application to the case of non tariff barriers," MPRA Paper 47254, University Library of Munich, Germany, revised Jun 2012.
  3. Marine George, 2013. "Does cross-border regulation really influence cross-border trade? Evidence from the Services Trade Restrictions Index," Post-Print dumas-00909960, HAL.

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