IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/333096.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/333096/files/9332.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dorothée Rouzet & Sebastian Benz & Francesca Spinelli, 2017. "Trading firms and trading costs in services: Firm-level analysis," OECD Trade Policy Papers 210, OECD Publishing.
    2. 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.
    3. Sebastian Benz, 2017. "Services trade costs: Tariff equivalents of services trade restrictions using gravity estimation," OECD Trade Policy Papers 200, OECD Publishing.
    4. Andreas Dür & Leonardo Baccini & Manfred Elsig, 2014. "The design of international trade agreements: Introducing a new dataset," The Review of International Organizations, Springer, vol. 9(3), pages 353-375, September.
    5. Sebastian Benz & Anupam Khanna & Hildegunn Kyvik Nordås, 2017. "Services and Performance of the Indian Economy: Analysis and Policy Options," OECD Trade Policy Papers 196, OECD Publishing.
    6. Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, February.
    7. Dür, Andreas & Baccini, Leonardo & Elsig, Manfred, 2014. "The design of international trade agreements: introducing a new dataset," LSE Research Online Documents on Economics 59179, London School of Economics and Political Science, LSE Library.
    8. repec:oup:qjecon:v:132:y:2016:i:1:p:157-209. is not listed on IDEAS
    9. Felix Tintelnot, 2017. "Global Production with Export Platforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(1), pages 157-209.
    10. 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.
    11. repec:hal:spmain:info:hdl:2441/6apm7lruv088iagm4rv2c33jtg is not listed on IDEAS
    12. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers hal-03579844, HAL.
    13. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," Post-Print hal-03579844, HAL.
    14. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers Main hal-03579844, HAL.
    15. Dorothée Rouzet & Francesca Spinelli, 2016. "Services Trade Restrictiveness, Mark-Ups and Competition," OECD Trade Policy Papers 194, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rouzet, Dorothée & Benz, Sebastian & Spinelli, Francesca, 2017. "Trading Firms and Trading Costs in Services: Firm-Level Analysis," Conference papers 332911, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    3. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2021. "Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 881-926, November.
    4. Benz, Sebastian & Jaax, Alexander, 2022. "The costs of regulatory barriers to trade in services: New estimates of ad valorem tariff equivalents," Economics Letters, Elsevier, vol. 212(C).
    5. Keith Head & Thierry Mayer, 2011. "Gravity, market potential and economic development," Journal of Economic Geography, Oxford University Press, vol. 11(2), pages 281-294, March.
    6. repec:hal:wpspec:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    7. Elisaveta Archanskaia & Guillaume Daudin, 2012. "Heterogeneity and the Distance Puzzle," Documents de Travail de l'OFCE 2012-17, Observatoire Francais des Conjonctures Economiques (OFCE).
    8. Das, Satya P. & Sant’Anna, Vinicios P., 2023. "Determinants of bilateral trade in manufacturing and services: A unified approach," Economic Modelling, Elsevier, vol. 123(C).
    9. Ziran Ding, 2022. "Firm heterogeneity, variable markups, and multinational production: A review from trade policy perspective," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1311-1357, December.
    10. repec:hal:spmain:info:hdl:2441/53r60a8s3kup1vc9ji21mi9p3 is not listed on IDEAS
    11. repec:hal:spmain:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    12. Absell, Christopher David & Incerpi, Andrea, 2022. "Opening the black box of distance: evidence from Italy, 1862-1938," IFCS - Working Papers in Economic History.WH 36226, Universidad Carlos III de Madrid. Instituto Figuerola.
    13. Thomas Orliac, 2012. "The economics of trade facilitation [L'économie de la facilitation des échanges]," SciencePo Working papers Main tel-03681980, HAL.
    14. Keith Head & Thierry Mayer, 2011. "Gravity, market potential and development," SciencePo Working papers Main hal-01024209, HAL.
    15. Larch, Mario & Yotov, Yoto, 2023. "Estimating the Effects of Trade Agreements: Lessons From 60 Years of Methods and Data," School of Economics Working Paper Series 2023-4, LeBow College of Business, Drexel University.
    16. Luigi Capoani, 2023. "Review of the gravity model: origins and critical analysis of its theoretical development," SN Business & Economics, Springer, vol. 3(5), pages 1-43, May.
    17. Liu, Chen & Ma, Xiao, 2023. "Migration, tariffs, and China's export surge," Journal of International Economics, Elsevier, vol. 140(C).
    18. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8mb6c01j is not listed on IDEAS
    19. Yuko Imura, 2023. "Reassessing Trade Barriers with Global Production Networks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 77-116, December.
    20. Chunyan Li & Jianmei Gao & Lanqing Ge & Weina Hu & Qi Ban, 2023. "Do Geographical Indication Products Promote the Growth of the Agricultural Economy? An Empirical Study Based on Meta-Analysis," Sustainability, MDPI, vol. 15(19), pages 1-21, October.
    21. Banri Ito & Katsunori Shirai, 2023. "Patent law harmonization and international trade," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 289-306, February.
    22. Bolatto, Stefano & Moramarco, Graziano, 2023. "Gains from trade and their quantification: Does sectoral disaggregation matter?," International Economics, Elsevier, vol. 174(C), pages 44-68.
    23. Nicolas Berman & Philippe Martin & Thierry Mayer, 2009. "How do Different Exporters React to Exchange Rate Changes? Theory, Empirics and Aggregate Implications," Working Papers 2009-32, CEPII research center.
    24. Bing Li & Linyue Li & Rou Li & Yunsong Yue, 2023. "Internet and firms’ exports and imports: Firm level evidence from China," The World Economy, Wiley Blackwell, vol. 46(3), pages 835-872, March.

    More about this item

    Keywords

    International Relations/Trade;

    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:ags:pugtwp:333096. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.