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Services Trade Restrictiveness and Manufacturing Productivity: The Role of Institutions

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  • Beverelli, Cosimo
  • Fiorini, Matteo
  • Hoekman, Bernard

Abstract

We study the effect of services trade restrictiveness on manufacturing productivity for a broad cross-section of countries at different stages of economic development. Decreasing services trade restrictiveness has a positive indirect impact on the manufacturing sectors that use services as intermediate inputs in production. We identify a critical role of local institutions in shaping this effect: countries with high institutional capacity benefit the most from services trade policy reforms in terms of increased productivity in downstream industries. We argue that this reflects the characteristics of many services and services trade and provide a theoretical framework to formalize our suggested mechanisms.

Suggested Citation

  • Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2015. "Services Trade Restrictiveness and Manufacturing Productivity: The Role of Institutions," CEPR Discussion Papers 10834, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10834
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    1. repec:ebl:ecbull:eb-18-00112 is not listed on IDEAS
    2. Fiorini, Matteo & Hoekman, Bernard, 2018. "Services trade policy and sustainable development," World Development, Elsevier, vol. 112(C), pages 1-12.
    3. Fiorini, Matteo; Lebrand, Mathilde, 2016. "The Political Economy of Services Trade Agreements," Economics Working Papers ECO2016/05, European University Institute.
    4. Bamieh, Omar & Fiorini, Matteo & Hoekman, Bernard & Jakubik, Adam, 2017. "Services Input Intensity and US Manufacturing Employment Responses to the China Shock," CEPR Discussion Papers 12173, C.E.P.R. Discussion Papers.
    5. Wenxi Lu, 2018. "Services Liberalisation, Export Similarity and Trade in Services," School of Economics Working Papers 2018-04, University of Adelaide, School of Economics.
    6. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    7. Matteo Fiorini & Bernard Hoekman & Clément Malgouyres, 2018. "Services policy reform and manufacturing employment: Evidence from transition economies," The World Economy, Wiley Blackwell, vol. 41(9), pages 2320-2348, September.
    8. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    9. repec:wbk:wbpubs:30245 is not listed on IDEAS
    10. repec:eee:inecon:v:117:y:2019:i:c:p:209-228 is not listed on IDEAS
    11. Matteo Fiorini & Bernard Hoekman, 2017. "Economic Governance, Regulation and Services Trade Liberalization," RSCAS Working Papers 2017/27, European University Institute.
    12. Woori Lee, 2017. "Services liberalization and GVC participation: New evidence for heterogeneous effects by income level and provisions," CTEI Working Papers series 08-2017, Centre for Trade and Economic Integration, The Graduate Institute.
    13. Andrea Goldstein & Alessia Amighini & Bernard Hoekman, 2016. "Revitalizing the Global Trading System: What Could the G20 Do?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(4), pages 34-54, July.
    14. Eppinger, Peter S., 2017. "Service offshoring and firm employment," University of Tuebingen Working Papers in Economics and Finance 103, University of Tuebingen, Faculty of Economics and Social Sciences.
    15. Bernard Hoekman & Douglas Nelson, 2018. "21st Century Trade Agreements and the Owl of Minerva," RSCAS Working Papers 2018/04, European University Institute.
    16. Bernard Hoekman & Dominique Njinkeu, 2017. "Integrating Africa: Some Trade Policy Research Priorities and Challenges," RSCAS Working Papers 2017/43, European University Institute.

    More about this item

    Keywords

    institutions; productivity; services; trade policy;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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