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Dark costs, missing data: Shedding some light on services trade

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  • Anderson, James E.
  • Borchert, Ingo
  • Mattoo, Aaditya
  • Yotov, Yoto V.

Abstract

We develop a method to project missing sectoral services output and trade. For OECD countries, projected and observed output data match well. The basis is a structural gravity model to estimate barriers to services trade across sectors, countries and time. The model fits well and reveals key differences across service sectors. Border barriers fall over time but unevenly. Inferred border barriers are fitted to national geography, technology, income and endowments, and institutional determinants. The fitted model including fitted border barriers is used to project missing internal and bilateral trade flows, aggregating to projected output.

Suggested Citation

  • Anderson, James E. & Borchert, Ingo & Mattoo, Aaditya & Yotov, Yoto V., 2018. "Dark costs, missing data: Shedding some light on services trade," European Economic Review, Elsevier, vol. 105(C), pages 193-214.
  • Handle: RePEc:eee:eecrev:v:105:y:2018:i:c:p:193-214
    DOI: 10.1016/j.euroecorev.2018.03.015
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    More about this item

    Keywords

    Gravity; Services trade; Trade costs in services; Home bias; Border effects;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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