Determinants of Comparative Advantage in Services
This paper analyzes whether and to what extent determinants of comparative advantage have explanatory power for conventional services trade. It assesses the geographical, Heckscher-Ohlin and institutional determinants of services trade based on the literature for goods trade. Moreover, this paper investigates the importance of a country’s governance of regulation as a source of comparative advantage in services markets. Determinants for services trade differ from goods. Services trade is more sensitive to a country’s stock of high-skilled and mid-skilled labour, more receptive to the level of trust enjoyed by any importers, and more dependant on the quality of regulatory governance practiced when liberalizing services sectors. The counterfactual analyses presented in this paper show furthermore that these factors when affected by policy can bring substantial gains to countries. Specifically, countries with already good regulatory governance structures would enjoy relatively higher growth share in services trade by capitalizing on their highskilled stock. Other countries, however, would instead to better by improving their condition of regulatory governance.
|Date of creation:||May 2012|
|Date of revision:|
|Contact details of provider:|| |
|Order Information:|| Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna|
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.:
- Jagdish Bhagwati & Alan S. Blinder, 2009. "Offshoring of American Jobs: What Response from U.S. Economic Policy?," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262013320 edited by Benjamin M. Friedman, June.
- Richard Baldwin & Daria Taglioni, 2006.
"Gravity for Dummies and Dummies for Gravity Equations,"
NBER Working Papers
12516, National Bureau of Economic Research, Inc.
- Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, C.E.P.R. Discussion Papers.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
- Carmen Fillat-Castej—n & Joseph Francois & Julia Woerz, 2008.
"TRADE THROUGH FDI: investing in services,"
IIDE Discussion Papers
20080502, Institue for International and Development Economics.
- Davin Chor, 2008.
"Unpacking Sources of Comparative Advantage : A Quantitative Approach,"
Macroeconomics Working Papers
22071, East Asian Bureau of Economic Research.
- Chor, Davin, 2010. "Unpacking sources of comparative advantage: A quantitative approach," Journal of International Economics, Elsevier, vol. 82(2), pages 152-167, November.
- Davin Chor, 2008. "Unpacking Sources of Comparative Advantage: A Quantitative Approach," Working Papers 13-2008, Singapore Management University, School of Economics.
- Nunn, Nathan, 2007.
"Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade,"
4686801, Harvard University Department of Economics.
- Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 569-600.
- Nathan Nunn, 2005. "Relationship Specificity, Incomplete Contracts and the Pattern of Trade," International Trade 0512018, EconWPA.
- Arjan Lejour & J.W. de Paiva Verheijden, 2004. "Services trade within Canada and the European Union; what do they have in common?," CPB Discussion Paper 42, CPB Netherlands Bureau for Economic Policy Analysis.
- Ejaz Ghani & Homi Kharas, 2010.
"The Service Revolution,"
World Bank Other Operational Studies
10187, The World Bank.
- Miroudot, Sébastien & Sauvage, Jehan & Shepherd, Ben, 2010.
"Measuring the Cost of International Trade in Services,"
27655, University Library of Munich, Germany.
- Miroudot, Sébastien & Sauvage, Jehan & Shepherd, Ben, 2013. "Measuring the cost of international trade in services," World Trade Review, Cambridge University Press, vol. 12(04), pages 719-735, October.
- John Romalis, 2004. "Factor Proportions and the Structure of Commodity Trade," American Economic Review, American Economic Association, vol. 94(1), pages 67-97, March.
- Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007.
"Estimating Trade Flows: Trading Partners and Trading Volumes,"
NBER Working Papers
12927, National Bureau of Economic Research, Inc.
- Rubinstein, Yona & Helpman, Elhanan & Melitz, Marc, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," Scholarly Articles 3228230, Harvard University Department of Economics.
- Shingal, ANIRUDH, 2009. "How much do agreements matter for services trade?," MPRA Paper 32815, University Library of Munich, Germany, revised 15 May 2010.
- repec:oup:restud:v:74:y:2007:i:3:p:791-819 is not listed on IDEAS
- V.N. Balasubramanyam, 2008. "Foreign Direct Investment," Chapters, in: International Handbook of Development Economics, Volumes 1 & 2, chapter 39 Edward Elgar.
- Fukunari Kimura & Hyun-Hoon Lee, 2006. "The Gravity Equation in International Trade in Services," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(1), pages 92-121, April.
- Kox, Henk L.M. & Nordås, Hildegunn Kyvik, 2007.
"Services trade and domestic regulation,"
2116, University Library of Munich, Germany.
- Andrei A. Levchenko, 2004.
"Institutional Quality and International Trade,"
IMF Working Papers
04/231, International Monetary Fund.
- Kolstad, Ivar & Villanger, Espen, 2008.
"Determinants of foreign direct investment in services,"
European Journal of Political Economy,
Elsevier, vol. 24(2), pages 518-533, June.
- Ivar Kolstad & Espen Villanger, 2004. "Determinants of foreign direct investment in services," CMI Working Papers WP 2004: 2, CMI (Chr. Michelsen Institute), Bergen, Norway.
- Amin, Mohammad & Mattoo, Aaditya, 2008. "Human capital and the changing structure of the Indian economy," Policy Research Working Paper Series 4576, The World Bank.
- Keith Walsh, 2006. "Trade in Services: Does Gravity Hold? A Gravity Model Approach to Estimating Barriers to Services Trade," The Institute for International Integration Studies Discussion Paper Series iiisdp183, IIIS.
When requesting a correction, please mention this item's handle: RePEc:wsr:wpaper:y:2012:i:087. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.