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The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data

  • Crozet, M.
  • Milet, E.
  • Mirza, D.

In order to promote international trade in services, the WTO-GATS aims at progressively eliminating discriminatory regulations, which apply to foreign suppliers, by guaranteeing equal national treatment. This paper looks instead at the trade effect of domestic regulations, which apply to all firms indifferently and do not intend to exclude foreign suppliers. We propose a theory-based empirical test to determine whether or not these domestic regulations affect foreign suppliers more than local ones. We take this test to the data by using French firm-level exports of professional services to OECD countries. Our econometric results show that domestic regulations in the importing markets matter significantly for trade in services. They reduce both the decision to export and the individual exports. These results tend to prove that domestic regulations are de facto discriminatory even if they are not de jure.

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Paper provided by Banque de France in its series Working papers with number 451.

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Length: 36 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:bfr:banfra:451
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Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS

Web page: http://www.banque-france.fr/

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