Measuring the Cost of International Trade in Services
AbstractWe present a new dataset of international trade costs in services sectors. Using a theory-based methodology combined with data on domestic shipments and cross-border trade, we find that trade costs in services are much higher than in goods sectors: a multiple of two to three times in many cases. Trade costs in services have remained relatively steady over the last ten years, whereas trade costs in goods have fallen overall at an impressive rate. We also present two examples of the ways in which our dataset could be used in future work. First, we examine the impact of regional trade agreements on trade costs in services. Although we find that intra-bloc trade costs are lower than those facing outside countries, the differential is usually quite small for services, and in some cases has even been narrowing over time. This finding accords with the observation that because service sector reform is about re-regulation, “preferential” agreements tend to involve less discrimination than in goods markets. Second, we show for the first time that services sectors with lower trade costs tend to be more productive, and experience faster productivity growth. This result lines up well with the evidence from goods markets.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27655.
Date of creation: 22 Dec 2010
Date of revision:
Trade policy; Trade in services; Regional integration; Productivity.;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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.:
- James E. Anderson & Eric van Wincoop, 2004.
Boston College Working Papers in Economics
593, Boston College Department of Economics.
- Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
- Novy, Dennis, 2008.
"Gravity Redux : Measuring International Trade Costs with Panel Data,"
The Warwick Economics Research Paper Series (TWERPS)
861, University of Warwick, Department of Economics.
- Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, 01.
- Dennis Novy, 2012. "Gravity Redux: Measuring International Trade Costs with Panel Data," CEP Discussion Papers dp1114, Centre for Economic Performance, LSE.
- Dennis Novy, 2011. "Gravity Redux: Measuring International Trade Costs with Panel Data," CESifo Working Paper Series 3616, CESifo Group Munich.
- Christian Broda & Joshua Greenfield & David Weinstein, 2006. "From Groundnuts to Globalization: A Structural Estimate of Trade and Growth," NBER Working Papers 12512, National Bureau of Economic Research, Inc.
- Sébastien Miroudot & Rainer Lanz & Alexandros Ragoussis, 2009. "Trade in Intermediate Goods and Services," OECD Trade Policy Papers 93, OECD Publishing.
- Philippa Dee, 2003. "Modelling the Policy Issues in Services Trade," Economie Internationale, CEPII research center, issue 94-95, pages 283-300.
- Holger Breinlich & Chiara Criscuolo, 2008. "Service Traders in the UK," CEP Discussion Papers dp0901, Centre for Economic Performance, LSE.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
- Arvis, Jean-François & Duval, Yann & Shepherd, Ben & Utoktham,Chorthip, 2013.
"Trade costs in the developing world : 1995 - 2010,"
Policy Research Working Paper Series
6309, The World Bank.
- Patrick Messerlin, 2010. "New challenging issues for world trade and the world economy Strategies for the EC-Turkey Custom Union," Sciences Po publications info:hdl:2441/5l6uh8ogmqi, Sciences Po.
- Hira Mujahid & Shaista Alam, 2014. "Service Sector as an Engine of Growth: Empirical Analysis of Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(3), pages 377-386, March.
- Van Der Marel, Erik & Shepherd, Ben, 2011.
"Services trade, regulation, and regional integration: Evidence from sectoral data,"
34343, University Library of Munich, Germany.
- Erik Marel & Ben Shepherd, 2013. "Services Trade, Regulation and Regional Integration: Evidence from Sectoral Data," The World Economy, Wiley Blackwell, vol. 36(11), pages 1393-1405, November.
- Erik van der Marel, 2012. "Determinants of Comparative Advantage in Services," FIW Working Paper series 087, FIW.
- Shepherd, Ben & Pasadilla, Gloria, 2012. "Services as a New Engine of Growth for ASEAN, the People’s Republic of China, and India," ADBI Working Papers 349, Asian Development Bank Institute.
- Shepherd, Ben, 2012. "Services firms in the developing world: An empirical snapshot," MPRA Paper 41732, University Library of Munich, Germany.
- Patrick Messerlin, 2010. "The European Community commercial policy," Sciences Po publications info:hdl:2441/5l6uh8ogmqi, Sciences Po.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.