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Intra-EU trade and investment in service sectors, and regulation patterns


  • Henk. L.M. Kox

    (CPB, Netherlands)

  • Arjan Lejour

    (CPB, Netherlands)

  • Raymond Montizaan


The paper sketches the basic patterns and facts about service trade, foreign direct investment and regulation in the EU. We conclude that the last decade trade in services has increased substantially, in particular in business services. This is also the case for foreign direct investment (in services). The level of regulation within the EU has decreased. Product-market regulation and FDI restrictions have been lowered. The process of deregulation proceeds with different speed, and this is the cause of an increased variance in the level of regulation over Europe. The level of regulation in the EU is relatively high in comparison with other OECD countries. The pace of deregulation in Europe during the 1990s was higher than in the United States, causing a process of convergence. Nonetheless, the level of product market regulation for non-manufacturing sectors is in the EU still considerably higher than in the USA.

Suggested Citation

  • Henk. L.M. Kox & Arjan Lejour & Raymond Montizaan, 2004. "Intra-EU trade and investment in service sectors, and regulation patterns," International Trade 0412002, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0412002
    Note: Type of Document - pdf; pages: 39. Statistical background Paper to 'The free movement of services in Europe' (by same authors, also in REPEC)

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    References listed on IDEAS

    1. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    2. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    3. Erkin I. Bairam, 1997. "Levels of Economic Development and Appropriate Specification of the Harrod Foreign-Trade Multiplier," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 19(3), pages 337-344, March.
    4. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    5. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
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    Cited by:

    1. Harald Badinger & Niklas Maydell, 2009. "Legal and Economic Issues in Completing the EU Internal Market for Services: An Interdisciplinary Perspective," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 693-717, September.
    2. Arjan Lejour & Henk Kox & Roland de Bruijn, 2006. "The trade-induced effects of the Services Directive and the country of origin principle," CPB Document 108, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Gelauff, George & Lejour, Arjan, 2006. "The new Lisbon Strategy: An estiamtion of the impact of reaching 5 Lisbon targets," MPRA Paper 16168, University Library of Munich, Germany.
    4. Henk Kox & Arjan Lejour & Raymond Montizaan, 2004. "The free movement of services within the EU," CPB Document 69, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item


    European Union; EU; internal market; services; service trade; direct investment; FDI; market regulation;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L8 - Industrial Organization - - Industry Studies: Services
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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