Trade in Services and Trade in Goods: Differences and Complementarities
The purpose of this paper is twofold. First, we explore empirically to what extent the determinants of trade in services differ from those of trade in goods. Second, by the use of instrumental variables, we explore potential complementarities between bilateral trade in goods and bilateral trade in services. Using a gravity framework, the main results show that bilateral trust and contract enforcement environment, networks, labour market regulations and variables denoting technology of communication have a higher impact on services trade than on goods trade. Finally, after using instrumental variables, we find that bilateral trade in goods explains bilateral trade in services the resulting estimated elasticity is close to 1. Reciprocally, bilateral trade in services also affects bilateral trade in goods, though to a lesser extent we find an estimated (positive) elasticity of 0.46.
|Length:||28 pages including 11 Tables and 3 Figures|
|Date of creation:||Apr 2009|
|Date of revision:|
|Publication status:||Published as wiiw Working Paper|
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References listed on IDEAS
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- repec:adr:anecst:y:2009:i:93-94:p:08 is not listed on IDEAS
- 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.
- Carolina Lennon & Daniel Mirza & Giuseppe Nicoletti, 2009. "Complementarity of Inputs across Countries in Services Trade," Post-Print hal-00813417, HAL.
- 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 611-31, November.
- Mary Amiti & Shang-Jin Wei, 2004.
"Fear of Service Outsourcing: Is It Justified?,"
NBER Working Papers
10808, National Bureau of Economic Research, Inc.
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