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How Do Restrictions to Trade in Services Affect Productivity?

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  • Porath, Yehuda
  • Sorbe, Stephane

Abstract

In the context of the global productivity slowdown and increasing trade tensions, we assess the effect of restrictions to trade in services on productivity in OECD countries. Services can be important inputs to the production of other industries (both manufacturing and other services). Restrictions to trade in services may reduce the availability of cheap and high-quality service inputs and thereby hinder productivity in downstream industries. To test for this, we match industry-level data on productivity to the OECD’s STRI (Services Trade Restrictiveness Index) which we use as an indicator of trade restrictions. To this end, we rely on detailed input-output tables (using the US economy as a benchmark) to derive the exposure of each downstream industry to different service inputs.

Suggested Citation

  • Porath, Yehuda & Sorbe, Stephane, 2019. "How Do Restrictions to Trade in Services Affect Productivity?," Conference papers 333035, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333035
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    References listed on IDEAS

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    1. Sébastien Miroudot & Charles Cadestin, 2017. "Services in Global Value Chains: Trade patterns and gains from specialisation," OECD Trade Policy Papers 208, OECD Publishing.
    2. Renaud Bourlès & Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2013. "Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1750-1768, December.
    3. 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.
    4. Hildegunn K. Nordås & Dorothée Rouzet, 2017. "The Impact of Services Trade Restrictiveness on Trade Flows," The World Economy, Wiley Blackwell, vol. 40(6), pages 1155-1183, June.
    5. Sébastien Miroudot & Charles Cadestin, 2017. "Services In Global Value Chains: From Inputs to Value-Creating Activities," OECD Trade Policy Papers 197, OECD Publishing.
    6. Stéphane Sorbe & Peter Gal & Valentine Millot, 2018. "Can productivity still grow in service-based economies?: Literature overview and preliminary evidence from OECD countries," OECD Economics Department Working Papers 1531, OECD Publishing.
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