The Competitiveness of European Services
The emergence of service offshoring places competitiveness at the centre of the discussion on international trade. The role of cost related factors driving trade performances is debated. However, although services trade becomes more dynamic, service competitiveness factors remain a field largely unexplored by applied economics. This paper addresses the role of cost-related factors explaining service competitiveness. It empirically tests trade performance of 15 European countries in 8 service markets in order to observe the role of cost-factors, country effects and industry specific patterns. A model based on regression analysis and panel data is suggested to test the influence of cost-determinants and their elasticities. REsults show great heterogeneity among service activities and suggest the importance of non-cost related factors within European Union countries.
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