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Trade costs and productivity in services sectors

Author

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  • Miroudot, Sébastien
  • Sauvage, Jehan
  • Shepherd, Ben

Abstract

This paper provides the first evidence linking lower international trade costs with higher productivity in services sectors. On average, lowering trade costs by 10% is associated with a gain in total factor productivity of around 0.5%, which is an effect of similar magnitude to that for goods sectors.

Suggested Citation

  • Miroudot, Sébastien & Sauvage, Jehan & Shepherd, Ben, 2012. "Trade costs and productivity in services sectors," Economics Letters, Elsevier, vol. 114(1), pages 36-38.
  • Handle: RePEc:eee:ecolet:v:114:y:2012:i:1:p:36-38
    DOI: 10.1016/j.econlet.2011.09.005
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    References listed on IDEAS

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    1. Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, January.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Fernandes, Ana M., 2007. "Trade policy, trade volumes and plant-level productivity in Colombian manufacturing industries," Journal of International Economics, Elsevier, vol. 71(1), pages 52-71, March.
    4. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    5. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 245-276.
    6. Keith Walsh, 2006. "Trade in Services: Does Gravity Hold? A Gravity Model Approach to Estimating Barriers to Services Trade," The Institute for International Integration Studies Discussion Paper Series iiisdp183, IIIS.
    7. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    9. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September.
    10. 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 374-403, June.
    11. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
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    Citations

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    Cited by:

    1. Pierre Sauvé & Anirudh Shingal, 2016. "Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Asian Development Review, MIT Press, vol. 33(1), pages 56-73, March.
    2. Dorothée Rouzet & Hildegunn Kyvik Nordås & Frederic Gonzales & Massimo Geloso Grosso & Iza Lejárraga & Sébastien Miroudot & Asako Ueno, 2014. "Services Trade Restrictiveness Index (STRI): Financial Services," OECD Trade Policy Papers 175, OECD Publishing.
    3. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    4. Anderson,James E. & Borchert,Ingo & Mattoo,Aaditya & Yotov,Yoto Valentinov & Anderson,James E. & Borchert,Ingo & Mattoo,Aaditya & Yotov,Yoto Valentinov, 2015. "Dark costs, missing data : shedding some light on services trade," Policy Research Working Paper Series 7465, The World Bank.
    5. Sébastien Miroudot & Ben Shepherd, 2014. "The Paradox of ‘Preferences’: Regional Trade Agreements and Trade Costs in Services," The World Economy, Wiley Blackwell, vol. 37(12), pages 1751-1772, December.
    6. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    7. Sauvé, Pierre & Shingal, Anirudh, 2014. "Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Working Papers on Regional Economic Integration 129, Asian Development Bank.
    8. Shepherd, Ben, 2012. "Services firms in the developing world: An empirical snapshot," MPRA Paper 41732, University Library of Munich, Germany.
    9. Kazuhiro Sugie & Massimo Geloso Grosso & Hildegunn Kyvik Nordås & Sébastien Miroudot & Frederic Gonzales & Dorothée Rouzet, 2015. "Services Trade Restrictiveness Index (STRI): Logistics Services," OECD Trade Policy Papers 183, OECD Publishing.
    10. Massimo Geloso Grosso & Hildegunn Kyvik Nordås & Frederic Gonzales & Iza Lejárraga & Sébastien Miroudot & Asako Ueno & Dorothée Rouzet, 2014. "Services Trade Restrictiveness Index (STRI): Legal and Accounting Services," OECD Trade Policy Papers 171, OECD Publishing.
    11. Egger, Peter & Shingal, Anirudh, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    12. Sébastien Miroudot & Ben Shepherd, 2015. "Regional Trade Agreements and Trade Costs in Services," RSCAS Working Papers 2015/85, European University Institute.
    13. Xiaodong Zhu & Trevor Tombe, 2015. "Trade, Migration and Regional Income Differences: Evidence from China," 2015 Meeting Papers 1534, Society for Economic Dynamics.
    14. repec:bla:worlde:v:40:y:2017:i:12:p:2901-2936 is not listed on IDEAS
    15. Massimo Geloso Grosso & Hildegunn Kyvik Nordås & Asako Ueno & Frederic Gonzales & Iza Lejárraga & Sébastien Miroudot & Dorothée Rouzet, 2014. "Services Trade Restrictiveness Index (STRI): Transport and Courier Services," OECD Trade Policy Papers 176, OECD Publishing.
    16. Massimo Geloso Grosso & Iza Lejárraga & Hildegunn Kyvik Nordås & Frederic Gonzales & Sébastien Miroudot & Asako Ueno & Dorothée Rouzet, 2014. "Services Trade Restrictiveness Index (STRI): Construction, Architecture and Engineering Services," OECD Trade Policy Papers 170, OECD Publishing.
    17. Roy, Martin, 2017. "The contribution of services trade policies to connectivity in the context of aid for trade," WTO Staff Working Papers ERSD-2017-12, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item

    Keywords

    Trade policy; Trade in services; Productivity;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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