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Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration

Author

Listed:
  • Mattoo, Aaditya

    (The World Bank)

  • Rathindran, Randeep

    (HDR Inc.)

Abstract

The paper has three purposes. First, it explains how the impact of liberalization of service sectors on output growth differs from that of liberalization of trade in goods. Second, it suggests a policy-based rather than outcome-based measure of the openness of a country’s services regime. Such openness measures are constructed for two key service sectors, basic telecommunications and financial services. Finally, it provides some econometric evidence-relatively strong for the financial sector and less strong, but nevertheless statistically significant, for the telecommunications sector-that openness in services influences long run growth performance . Our estimates suggest that countries with fully open telecom and financial services sectors grow up to 1.5 percentage points faster than other countries.

Suggested Citation

  • Mattoo, Aaditya & Rathindran, Randeep, 2006. "Measuring Services Trade Liberalization and Its Impact on Economic Growth: An Illustration," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 64-98.
    • Handle: RePEc:ris:integr:0346
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Liberalization; Economic Growth; Services; Regulation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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