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The Determinants of Trade Agreements in Services vs. Goods


  • Matthew T. Cole

    () (Department of Economics, Florida International University)

  • Am¨¦lie Guillin

    () (Universit¨¦ Paris-Est Cr¨¦teil)


Since Baier and Bergstrand (2004) there has been a focus on empirically testing the economic determinants of signing a free trade agreement (FTA). However, FTAs do not imply an agreement on services; a separate economic integration (EIA) is needed. As trade in services is one of the fastest growing sectors of the global economy, it is important to pay special attention to these agreements. We use the methodology of Baier and Bergstrand (2004) to investigate differences in the determinants of signing an agreement on goods trade and services trade. In addition to the standard economic variables, we include variables for skilled/unskilled labor, and political stability. We fi?nd in general, qualitative similarities (though different magnitudes) and some robust specific differences.

Suggested Citation

  • Matthew T. Cole & Am¨¦lie Guillin, 2013. "The Determinants of Trade Agreements in Services vs. Goods," Working Papers 1307, Florida International University, Department of Economics.
  • Handle: RePEc:fiu:wpaper:1307

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    References listed on IDEAS

    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, July.
    2. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    3. Carolina Lennon, 2008. "Trade in services and trade in goods: differences and complementarities," PSE Working Papers halshs-00586223, HAL.
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    6. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
    7. Adlung, Rudolf & Roy, Martin, 2005. "Turning hills into mountains? Current commitments under the GATS and prospects for change," WTO Staff Working Papers ERSD-2005-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767, March.
    9. Egger, Peter & Shingal, Anirudh, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    10. Daniel L. McFadden, 1976. "Quantal Choice Analaysis: A Survey," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 363-390 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Egger, Peter & Shingal, Anirudh, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    2. Pierre Sauvé & Anirudh Shingal, 2016. "Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Asian Development Review, MIT Press, vol. 33(1), pages 56-73, March.
    3. Sauvé, Pierre & Shingal, Anirudh, 2014. "Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Working Papers on Regional Economic Integration 129, Asian Development Bank.
    4. Roy, Martin & Sauvé, Pierre & Shingal, Anirudh, 2014. "Are Asian services markets optimal regulatory convergence areas?," Papers 719, World Trade Institute.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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