Are trade costs higher for services than for manufactures? Evidence from firm-level data
Using a unique database, I estimate the costs of trading with European Union countries, relative to the costs of trading with the domestic market, for services and manufacturing firms located in the Basque Country region of Spain. I find that, despite the dramatic improvement in information and communication technologies, international trade costs for services are still much larger than for manufactures. Based on standard elasticities of substitution used in the literature, our results suggest that the tariff equivalent of international trade costs is between 50% and 60% larger for services than for manufactures.
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- Joseph Francois & Bernard Hoekman, 2010.
"Services Trade and Policy,"
Journal of Economic Literature,
American Economic Association, vol. 48(3), pages 642-692, September.
- Francois, Joseph & Hoekman, Bernard, 2009. "Services Trade and Policy," CEPR Discussion Papers 7616, C.E.P.R. Discussion Papers.
- Joseph F. Francois & Bernard Hoekman, 2009. "Services Trade and Policy," Economics working papers 2009-03, Department of Economics, Johannes Kepler University Linz, Austria.
- Joseph F. Francois & B. Hoekman, 2009. "Services Trade and Policy," wiiw Working Papers 60, The Vienna Institute for International Economic Studies, wiiw.
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- Martina Lawless, 2010. "Deconstructing gravity: trade costs and extensive and intensive margins," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1149-1172, November.
- Lawless, Martina, 2008. "Deconstructing Gravity: Trade Costs and Extensive and Intensive Margins," MPRA Paper 10230, University Library of Munich, Germany.
- Lawless, Martina, 2008. "Deconstructing Gravity: Trade Costs and Extensive and Intensive Margins," Research Technical Papers 5/RT/08, Central Bank of Ireland.
- James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341. Full references (including those not matched with items on IDEAS)
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