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Services trade policy and industry performance in African economies

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  • Matteo Fiorini
  • Bernard Hoekman
  • Dennis Quinn

Abstract

This paper assesses the potential impacts of services trade liberalisation for a sample of African countries. The focus is on the relationship between labour productivity of manufacturing sectors and two types of services trade‐related policies – restrictions on foreign direct investment (FDI) in services and restrictions on international payments for invisibles. The analysis takes into account differences across manufacturing sectors in the intensity of use of different services as inputs into production as well as difference in the quality of economic governance across countries. We find that services trade liberalisation may have substantial positive impacts on the performance of manufacturing sectors, and increase with services input intensity and the quality of governance.

Suggested Citation

  • Matteo Fiorini & Bernard Hoekman & Dennis Quinn, 2023. "Services trade policy and industry performance in African economies," The World Economy, Wiley Blackwell, vol. 46(2), pages 382-395, February.
    • Handle: RePEc:bla:worlde:v:46:y:2023:i:2:p:382-395
    DOI: 10.1111/twec.13361
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    References listed on IDEAS

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    1. Arnold, Jens M. & Javorcik, Beata S. & Mattoo, Aaditya, 2011. "Does services liberalization benefit manufacturing firms?: Evidence from the Czech Republic," Journal of International Economics, Elsevier, vol. 85(1), pages 136-146, September.
    2. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    3. Hoekman, Bernard & Shepherd, Ben, 2021. "Services Trade Policies and Economic Integration: New Evidence for Developing Countries," World Trade Review, Cambridge University Press, vol. 20(1), pages 115-134, February.
    4. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    5. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    6. Ingo Borchert & Batshur Gootiiz & Aaditya Mattoo, 2014. "Policy Barriers to International Trade in Services: Evidence from a New Database," The World Bank Economic Review, World Bank, vol. 28(1), pages 162-188.
    7. Quinn, Dennis, 1997. "The Correlates of Change in International Financial Regulation," American Political Science Review, Cambridge University Press, vol. 91(3), pages 531-551, September.
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    Cited by:

    1. Debrah, Yaw A. & Olabode, Oluwaseun E. & Olan, Femi & Nyuur, Richard B., 2024. "The African Continental Free Trade Area (AfCFTA): Taking stock and looking ahead for international business research," Journal of International Management, Elsevier, vol. 30(2).
    2. Benjamin Nitsche & Henry Kofi Mensah & Frank Straube & Vianney Barigye, 2024. "Leveraging the Potential of the African Continental Free Trade Area: Logistics Challenges and Development Paths for Future Value Chains in Africa," Logistics, MDPI, vol. 8(1), pages 1-16, February.

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