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Foreign affiliate sales and the measurement of trade in both goods and services

Author

Listed:
  • Li, Chunding
  • Whalley, John
  • Chen, Yan

Abstract

There is an incompatibility between measures of trade in goods and services. The measures of goods trade reflecting GATT are restricted to trade that crosses borders. Service trade, however, under GATS includes both cross-border delivery and foreign affiliate sales within borders. We propose that for comparability the trade component of foreign affiliate sales in goods should be included in goods trade or affiliate sales should be removed from the service trade data. We make modifications to reported goods and services trade for specific countries by using data on affiliate sales to produce more consistently measured cross country estimates of trade flows.

Suggested Citation

  • Li, Chunding & Whalley, John & Chen, Yan, 2015. "Foreign affiliate sales and the measurement of trade in both goods and services," China Economic Review, Elsevier, vol. 36(C), pages 394-405.
    • Handle: RePEc:eee:chieco:v:36:y:2015:i:c:p:394-405
    DOI: 10.1016/j.chieco.2015.01.002
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    References listed on IDEAS

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    1. Ricardo Hausmann & Federico Sturzenegger, 2006. "Global Imbalances or Bad Accounting? The Missing Dark Matter in the Wealth of Nations," CID Working Papers 124, Center for International Development at Harvard University.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trade statistics; Foreign affiliate sales; Commercial presence; Cross-border trade;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

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