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How much do agreements matter for services trade?

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  • Shingal, ANIRUDH

Abstract

With an increasing number of Preferential Trade Agreements (PTAs) covering trade in services, we explore the impact of PTAs on services trade. To the best of our knowledge, this is the first paper in this literature that endogenizes the impact of preferentialism in estimating the trade effect. We also add to this literature by distilling the trade effect of PTAs into that emanating from services and “goods only” agreements and further confirm complementarities between the two. Moreover, we study these relationships disaggregated by the economic status of the partner countries and by the reciprocity of commitments. Our results suggest trade effects of 11.6 – 12.7% from having a services accord alone. They also reveal that the underlying services trade between countries has been driven as much by IRS as by factor differences and that asymmetric trade alliance between North-South partners has been successful in fostering inter-industry trade.

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File URL: http://mpra.ub.uni-muenchen.de/39436/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32815.

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Date of creation: 17 Jun 2009
Date of revision: 15 May 2010
Handle: RePEc:pra:mprapa:32815

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Related research

Keywords: Services trade; RTAs; gravity model; endogeneity; North-South;

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References

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Citations

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Cited by:
  1. Shingal, Anirudh, 2013. "Revisiting the trade effects of services agreements," MPRA Paper 51243, University Library of Munich, Germany.
  2. Erik van der Marel, 2012. "Determinants of Comparative Advantage in Services," FIW Working Paper series 087, FIW.
  3. Van Der Marel, Erik & Shepherd, Ben, 2011. "Services trade, regulation, and regional integration: Evidence from sectoral data," MPRA Paper 34343, University Library of Munich, Germany.
  4. Bianka Dettmer, 2012. "The European Union's service directive: Contrasting ex ante estimates with empirical evidence," Jena Economic Research Papers 2012-019, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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