Trade in services and trade in goods: differences and complementarities
The purpose of this paper is double. First, we empirically explore to what extent the determinants of trade in services differs from those of trade in goods and, second, by the use of instrumental variables, we explore for potential complementarities between bilateral trade in goods and bilateral trade in services. By the use of gravity equations, the main results show that "bilateral trust and contract enforcement environment", "networks", "labor markets" and "technology and technology of communication" have higher impact on service trade than on trade in goods; finally, after instrumenting for endogeneity, we found that bilateral trade in goods explains bilateral trade in services: the resulting estimated elasticity is close to 1. Reciprocally, though to a lesser extent, bilateral trade in services affects positively bilateral trade in goods: a 10% increase in trade in services raises traded goods by 4.6%.
|Date of creation:||Sep 2008|
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carolina Lennon & Daniel Mirza & Giuseppe Nicoletti, 2009.
"Complementarity of Inputs across Countries in Services Trade,"
- Carolina Lennon & Daniel Mirza & Giuseppe Nicoletti, 2009. "Complementarity of Inputs across Countries in Services Trade," Annals of Economics and Statistics, GENES, issue 93-94, pages 161-182.
- Mary Amiti & Shang-Jin Wei, 2004.
"Fear of Service Outsourcing: Is It Justified?,"
NBER Working Papers
10808, National Bureau of Economic Research, Inc.
- repec:adr:anecst:y:2009:i:93-94:p:08 is not listed on IDEAS
- van Marrewijk, Charles & Stibora, Joachim & de Vaal, Aldert, 1996. "Services Tradability, Trade Liberalization and Foreign Direct Investment," Economica, London School of Economics and Political Science, vol. 63(252), pages 611-631, November.
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