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Appraising the Options for International Trade in Services

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  • Jones, Ronald W
  • Ruane, Frances

Abstract

This paper considers an economy that has the option of opening up its service sector to international trade at either the factor or the product level. Assuming nonidentical technologies in the context of a competitive, specific-factors framework, the paper shows that opening up trade always results in welfare gains, but that the extent of the welfare gain, and consequential adjustments in output and income distribution, depend crucially on whether trade occurs at the product or the factor level. Both factor endowments and the degree of technological comparative advantage or disadvantage play a role in determining the preferred level for trade. Copyright 1990 by Royal Economic Society.

Suggested Citation

  • Jones, Ronald W & Ruane, Frances, 1990. "Appraising the Options for International Trade in Services," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 672-687, October.
  • Handle: RePEc:oup:oxecpp:v:42:y:1990:i:4:p:672-87
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    References listed on IDEAS

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    Cited by:

    1. Mario Polese & Roger Verreault, 1989. "Trade in Information-Intensive Services: How and Why Regions Develop Export Advantages," Canadian Public Policy, University of Toronto Press, vol. 15(4), pages 376-386, December.
    2. Guerrieri, Paolo & Meliciani, Valentina, 2005. "Technology and international competitiveness: The interdependence between manufacturing and producer services," Structural Change and Economic Dynamics, Elsevier, vol. 16(4), pages 489-502, December.
    3. van Marrewijk, Charles & Stibora, Joachim & de Vaal, Albert & Viaene, Jean-Marie, 1997. "Producer services, comparative advantage, and international trade patterns," Journal of International Economics, Elsevier, vol. 42(1-2), pages 195-220, February.
    4. Cillian Ryan & Nicholas Horsewood, 2009. "The role of banks in financial integration: evidence from new EU members," International Economics and Economic Policy, Springer, vol. 6(3), pages 235-258, October.
    5. Ngee Choon Chia & Whalley, John, 1997. "A numerical example showing globally welfare-worsening liberalization of international trade in banking services," Journal of Policy Modeling, Elsevier, vol. 19(2), pages 119-127, April.
    6. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena.

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