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The Tradability Of Services: Geographic Concentration And Trade Costs

  • Antoine Gervais
  • J. Bradford Jensen

We develop a methodology for estimating the “tradability” of goods and services using data on U.S. establishments. Our results show that the average service industry is less tradable than the average manufacturing industry. However, there is considerable within-sector variation in estimated tradability and many service industries are as tradable as manufacturing. Tradable service industries account for a significant share of economic activity and workers employed in those industries have relatively high average wages. Counterfactual analysis indicates that the potential welfare gains from policy liberalization in service trade are of the same order of magnitude as liberalization in the manufacturing sector.

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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 14-03.

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Length: 43 pages
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:cen:wpaper:14-03
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  1. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
  2. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  3. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
  4. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  5. Holmes, T.J. & Schmitz, J.A., 1992. "On the Turnover of Business Firms and Business Managers," Working papers 9211, Wisconsin Madison - Social Systems.
  6. Hoekman, Bernard, 2006. "Liberalizing trade in services : a survey," Policy Research Working Paper Series 4030, The World Bank.
  7. Breinlich, Holger & Criscuolo, Chiara, 2010. "International Trade in Services: A Portrait of Importers and Exporters," CEPR Discussion Papers 7837, C.E.P.R. Discussion Papers.
  8. Runjuan Liu & Daniel Trefler, 2008. "Much Ado About Nothing: American Jobs and the Rise of Service Outsourcing to China and India," NBER Working Papers 14061, National Bureau of Economic Research, Inc.
  9. repec:oup:qjecon:v:123:y:2008:i:2:p:441-487 is not listed on IDEAS
  10. Robert C. Feenstra & Robert E. Lipsey & Lee G. Branstetter & C. Fritz Foley & James Harrigan & J. Bradford Jensen & Lori Kletzer & Catherine Mann & Peter K. Schott & Greg C. Wright, 2010. "Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment," NBER Working Papers 16254, National Bureau of Economic Research, Inc.
  11. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  12. Francisco J. Buera & Joseph P. Kaboski, 2009. "The Rise of the Service Economy," NBER Working Papers 14822, National Bureau of Economic Research, Inc.
  13. Jeremy T. Fox & Valérie Smeets, 2011. "Does Input Quality Drive Measured Differences in Firm Productivity?," NBER Working Papers 16853, National Bureau of Economic Research, Inc.
  14. Egger, Peter & Larch, Mario & Staub, Kevin E, 2012. "Trade Preferences and Bilateral Trade in Goods and Services: A Structural Approach," CEPR Discussion Papers 9051, C.E.P.R. Discussion Papers.
  15. James E. Anderson & Catherine A. Milot & Yoto V. Yotov, 2011. "The Incidence of Geography on Canada's Services Trade," NBER Working Papers 17630, National Bureau of Economic Research, Inc.
  16. Gary Clyde Hufbauer & Jeffrey J. Schott & Woan Foong Wong, 2010. "Figuring Out the Doha Round," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa91.
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