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Quantifying the costs of regulatory barriers to trade in services: New estimates of ad valorem equivalents based on the OECD STRI

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  • Benz, Sebastian
  • Jaax, Alexander

Abstract

This paper exploits information from the OECD Services Trade Restrictiveness Index (STRI) for the period of 2014-2016 to estimate ad valorem equivalents (AVEs) of services trade barriers for 44 countries. Drawing on longitudinal data on regulatory measures affecting cross-border trade in services, our econometric approach controls for multilateral resistance terms and time fixed effects. We also control for the depth of services provisions in bilateral agreements. AVEs are computed for 5 services sectors, with a new dataset on regulatory barriers within the European Economic Area (EEA) allowing for the additional calculation of AVEs for services trade between EEA member countries. Results indicate that the median AVE for trade in financial services is around 130% and around 100% for communication, business services and transport services. Within the EEA, median AVEs for all four sectors lie between 20% and 30%. Trade costs in insurance services are somewhat lower, the median being 5% within the EEA and 60% for other country pairs.

Suggested Citation

  • Benz, Sebastian & Jaax, Alexander, 2019. "Quantifying the costs of regulatory barriers to trade in services: New estimates of ad valorem equivalents based on the OECD STRI," Conference papers 333096, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333096
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    References listed on IDEAS

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    1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    2. Dorothée Rouzet & Sebastian Benz & Francesca Spinelli, 2017. "Trading firms and trading costs in services: Firm-level analysis," OECD Trade Policy Papers 210, OECD Publishing.
    3. Dorothée Rouzet & Francesca Spinelli, 2016. "Services Trade Restrictiveness, Mark-Ups and Competition," OECD Trade Policy Papers 194, OECD Publishing.
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    10. repec:oup:qjecon:v:132:y:2016:i:1:p:157-209. is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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