IDEAS home Printed from https://ideas.repec.org/p/adl/wpaper/2018-04.html
   My bibliography  Save this paper

Services Liberalisation, Export Similarity and Trade in Services

Author

Listed:
  • Wenxi Lu

    () (School of Economics, University of Adelaide)

Abstract

Studies show that service activities are essential for promoting manufacturing productivity and economic development. This raises an important question of how to promote services trade and whether policy liberalisation contributes to its development. The study examines the impact of policies on trade in services across countries using export data from UN Comtrade, where restrictions on trade as a result of policy are measured by the Services Trade Restrictiveness Index (STRI). The estimations are in the form of a log-linear gravity model analyzing the effect of STRI on bilateral services trade and one-sided service exports. Our results show that a one per cent increase in the overall STRI brings about a 0.25%–0.29% decrease in bilateral services trade and a 0.04% decrease in service exports. In addition, goods trade networks and export similarity show significant and positive impacts on services trade.

Suggested Citation

  • Wenxi Lu, 2018. "Services Liberalisation, Export Similarity and Trade in Services," School of Economics Working Papers 2018-04, University of Adelaide, School of Economics.
  • Handle: RePEc:adl:wpaper:2018-04
    as

    Download full text from publisher

    File URL: http://economics.adelaide.edu.au/research/papers/doc/wp2018-04.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Markusen, James R. & Melvin, James R. & Maskus, Keith E. & Kaempfer, William, 1995. "International trade: theory and evidence," MPRA Paper 21989, University Library of Munich, Germany.
    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. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 489-530.
    4. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    5. Bahar, Dany & Hausmann, Ricardo & Hidalgo, Cesar A., 2014. "Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?," Journal of International Economics, Elsevier, vol. 92(1), pages 111-123.
    6. Mehta, Aashish & Hasan, Rana, 2012. "The effects of trade and services liberalization on wage inequality in India," International Review of Economics & Finance, Elsevier, vol. 23(C), pages 75-90.
    7. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    8. Hildegunn Kyvik Nordås & Dorothée Rouzet, 2015. "The Impact of Services Trade Restrictiveness on Trade Flows: First Estimates," OECD Trade Policy Papers 178, OECD Publishing.
    9. repec:bla:worlde:v:40:y:2017:i:3:p:499-516 is not listed on IDEAS
    10. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    11. Caroline Freund & Diana Weinhold, 2002. "The Internet and International Trade in Services," American Economic Review, American Economic Association, vol. 92(2), pages 236-240, May.
    12. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    13. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    14. repec:bla:worlde:v:40:y:2017:i:3:p:532-543 is not listed on IDEAS
    15. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    16. Erik Marel & Ben Shepherd, 2013. "Services Trade, Regulation and Regional Integration: Evidence from Sectoral Data," The World Economy, Wiley Blackwell, vol. 36(11), pages 1393-1405, November.
    17. Peter H. Egger & Joseph Francois & Douglas R. Nelson, 2017. "The Role of Goods-Trade Networks for Services-Trade Volume," The World Economy, Wiley Blackwell, vol. 40(3), pages 532-543, March.
    18. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    19. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    trade in service; Services Trade Restriction Index; export similarity;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adl:wpaper:2018-04. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolas Groshenny). General contact details of provider: http://edirc.repec.org/data/decadau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.