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Service Traders in the UK

  • Holger Breinlich
  • Chiara Criscuolo

We provide a novel set of stylized facts on firms engaging in international trade in services, using unique firm-level data on services exports and imports in the United Kingdom in 2000- 2005. Less than 10% of firms trade in services but they can be found in all sectors of the UK economy. While the services sector accounts for 80% of total exports and imports, the frequency and trade intensity of services traders is often higher in sectors such as high- tech manufacturing. Services traders are bigger, more productive and are more likely to be foreign owned or part of a multinational enterprise. These 'trade premia' are smaller then for goods traders, however, with the exception of skill intensity which is higher among services traders. There are also significant differences between exporters and importers of services. Furthermore, we show that most firms only export or import a single service type and trade with a small number of countries. Trade volume, employment, turnover and value added are highly concentrated among a small group of firms trading with many countries and/or in many services types. These firms are characterised by bigger size and higher than average productivity, all of which seem to be principally correlated with more trade along the intensive margin (trade per services and country) .although there are a number of noteworthy exceptions. Interestingly, trade is also concentrated within .rms. The top export and import destination make up 70% of the average firm's total trade and the top services type around 90%. This strong concentration is still present among firms trading with many countries and/or in many products.

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File URL: http://cep.lse.ac.uk/pubs/download/dp0901.pdf
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0901.

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Date of creation: Dec 2008
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Handle: RePEc:cep:cepdps:dp0901
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  1. Mary Amiti & Shang-Jin Wei, 2005. "Service offshoring, Productivity, and Employment; Evidence From the United States," IMF Working Papers 05/238, International Monetary Fund.
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  3. Alexander Hijzen & Mauro Pisu & Richard Upward & Peter W. Wright, 2011. "Employment, job turnover, and trade in producer services: UK firm-level evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 1020-1043, August.
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  12. Anne-Célia Disdier & Keith Head, 2004. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," Development Working Papers 186, Centro Studi Luca d\'Agliano, University of Milano.
  13. David Hummels & Alexandre Skiba, 2004. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1384-1402, December.
  14. Robert E. Lipsey, 2006. "Measuring International Trade in Services," NBER Working Papers 12271, National Bureau of Economic Research, Inc.
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  16. Head, Keith & Mayer, Thierry & Ries, John, 2009. "How remote is the offshoring threat?," European Economic Review, Elsevier, vol. 53(4), pages 429-444, May.
  17. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," NBER Working Papers 13054, National Bureau of Economic Research, Inc.
  18. Kalina Manova & Zhiwei Zhang, 2009. "China's Exporters and Importers: Firms, Products and Trade Partners," NBER Working Papers 15249, National Bureau of Economic Research, Inc.
  19. Rachel Griffith, 1999. "Using the ARD establishment level data to look at foreign ownership and productivity in the UK," IFS Working Papers W99/06, Institute for Fiscal Studies.
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