IDEAS home Printed from https://ideas.repec.org/a/cii/cepiie/2015-q4-144-4.html
   My bibliography  Save this article

The determinants of trade agreements in services vs. goods

Author

Listed:
  • Matthew T. Cole
  • Amélie Guillin

Abstract

Since Baier and Bergstrand (2004) there has been a focus on empirically testing the economic determinants of signing a free trade agreement (FTA). However, FTAs do not imply an agreement on services; a separate economic integration (EIA) is needed. As trade in services is one of the fastest growing sectors of the global economy, it is important to pay special attention to these agreements. We use the methodology of Baier and Bergstrand (2004) to investigate differences in the determinants of signing an agreement on goods trade and services trade. In addition to the standard economic variables, we include variables for skilled/unskilled labor, and political stability. We find in general, qualitative similarities (though different magnitudes) and some robust specific differences.

Suggested Citation

  • Matthew T. Cole & Amélie Guillin, 2015. "The determinants of trade agreements in services vs. goods," International Economics, CEPII research center, issue 144, pages 66-82.
    • Handle: RePEc:cii:cepiie:2015-q4-144-4
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2110701715000505
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, April.
    2. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    3. Carolina Lennon, 2008. "Trade in services and trade in goods: differences and complementarities," PSE Working Papers halshs-00586223, HAL.
    4. Moritz Schularick & Alan M. Taylor, 2012. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870-2008," American Economic Review, American Economic Association, vol. 102(2), pages 1029-1061, April.
    5. Mario A. Cleves, 2002. "From the help desk: Comparing areas under receiver operating characteristic curves from two or more probit or logit models," Stata Journal, StataCorp LP, vol. 2(3), pages 301-313, August.
    6. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
    7. Adlung, Rudolf & Roy, Martin, 2005. "Turning hills into mountains? Current commitments under the GATS and prospects for change," WTO Staff Working Papers ERSD-2005-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. James R. Markusen & Bridget Strand, 2009. "Adapting the Knowledge‐capital Model of the Multinational Enterprise to Trade and Investment in Business Services," The World Economy, Wiley Blackwell, vol. 32(1), pages 6-29, January.
    9. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
    10. Egger, Peter & MILE 02, Anirudh Shingal, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    11. Bergstrand, Jeffrey H. & Egger, Peter, 2013. "What determines BITs?," Journal of International Economics, Elsevier, vol. 90(1), pages 107-122.
    12. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, September.
    13. James Markusen & Bridget Strand, 2008. "Offshoring of Business Services in Small Open Economies: Toward a General-Equilibrium Modeling Approach," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 231-246, December.
    14. Daniel L. McFadden, 1976. "Quantal Choice Analysis: A Survey," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 363-390, National Bureau of Economic Research, Inc.
    15. Daniel McFadden, 1975. "The Revealed Preferences of a Government Bureaucracy: Theory," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 401-416, Autumn.
    16. Baldwin,Richard & Haapararanta,Pertti & Kiander,Jaakko (ed.), 1995. "Expanding Membership of the European Union," Cambridge Books, Cambridge University Press, number 9780521481342, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:glopol:v:8:y:2017:i:s5:p:113-123 is not listed on IDEAS
    2. H. Stephen Gardner & Lourenço S. Paz & John Ssozi, 2023. "The influence of international trade on labour productivity in services: The case of Brazil in the 1990s," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 268-290, February.
    3. Lin, Qi & Lin, Xi, 2023. "Unveiling the trade and welfare effects of regional services trade agreements: A structural gravity approach," Economic Modelling, Elsevier, vol. 127(C).
    4. MILE 02, Anirudh Shingal & Roy, Martin & Sauvé, Pierre, 2014. "Are Asian services markets optimal regulatory convergence areas?," Papers 719, World Trade Institute.
    5. Egger, Peter & MILE 02, Anirudh Shingal, 2014. "Determinants of services trade agreements," Papers 721, World Trade Institute.
    6. Klaus H. Goetz & Ronny Patz & Katharina Michaelowa, 2017. "Resourcing International Organisations: So What?," Global Policy, London School of Economics and Political Science, vol. 8, pages 113-123, August.
    7. Pierre Sauvé & Anirudh Shingal, 2016. "Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Asian Development Review, MIT Press, vol. 33(1), pages 56-73, March.
    8. Peter Egger & Anirudh Shingal, 2021. "Determinants of services trade agreement membership," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 21-64, February.
    9. Sauvé, Pierre & Shingal, Anirudh, 2014. "Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Working Papers on Regional Economic Integration 129, Asian Development Bank.
    10. Kollie, Genesis B., 2022. "International Trade, Economic Growth and Governance: Evidence from ECOWAS Member Countries," African Journal of Economic Review, African Journal of Economic Review, vol. 10(3), June.
    11. Peter H. Egger & Anirudh Shingal, 2017. "Granting preferential market access in services sequentially versus jointly with goods," The World Economy, Wiley Blackwell, vol. 40(12), pages 2901-2936, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bergstrand, Jeffrey H. & Egger, Peter, 2013. "What determines BITs?," Journal of International Economics, Elsevier, vol. 90(1), pages 107-122.
    2. Baier, Scott L & Bergstrand, Jeffery H & Mariutto, Roland., 2010. "The Growth of Bilateralism," CAGE Online Working Paper Series 12, Competitive Advantage in the Global Economy (CAGE).
    3. Peter Egger & Anirudh Shingal, 2021. "Determinants of services trade agreement membership," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 21-64, February.
    4. Scott L. Baier & Jeffrey H. Bergstrand & Ronald Mariutto, 2014. "Economic Determinants of Free Trade Agreements Revisited: Distinguishing Sources of Interdependence," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 31-58, February.
    5. Sauvé, Pierre & Shingal, Anirudh, 2014. "Why do Countries enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Working Papers on Regional Economic Integration 129, Asian Development Bank.
    6. Pierre Sauvé & Anirudh Shingal, 2016. "Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets," Asian Development Review, MIT Press, vol. 33(1), pages 56-73, March.
    7. repec:wsr:wpaper:y:2015:i:142 is not listed on IDEAS
    8. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    9. Giovanni Facchini & Peri Silva & Gerald Willmann, 2015. "The Political Economy of Preferential Trade Arrangements: An Empirical Investigation," Discussion Papers 2015-16, University of Nottingham, GEP.
    10. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    11. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2012. "The Geography of Conflicts and Regional Trade Agreements," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(4), pages 1-35, October.
    12. Shingal, Anirudh, 2013. "Revisiting the trade effects of services agreements," MPRA Paper 51243, University Library of Munich, Germany.
    13. Maria Borga & Perla Ibarlucea Flores & Monika Sztajerowska, 2020. "Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective," OECD Working Papers on International Investment 2019/03, OECD Publishing.
    14. Moser, Christoph & Rose, Andrew K., 2014. "Who benefits from regional trade agreements? The view from the stock market," European Economic Review, Elsevier, vol. 68(C), pages 31-47.
    15. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    16. Giovanni Facchini & Peri Silva & Gerald Willmann, 2021. "The Political Economy of Preferential Trade Agreements: An Empirical Investigation [Distributive politics and economic growth]," The Economic Journal, Royal Economic Society, vol. 131(640), pages 3207-3240.
    17. Egger Peter & Wamser Georg, 2013. "Effects of the Endogenous Scope of Preferentialism on International Goods Trade," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 709-731, July.
    18. Hiroshi Daisaka & Taiji Furusawa, 2014. "Dynamic Free Trade Networks: Some Numerical Results," Review of International Economics, Wiley Blackwell, vol. 22(3), pages 469-487, August.
    19. Ross Jestrab, 2021. "The effects of domestic labour mobility on trade agreements: Empirical evidence," The World Economy, Wiley Blackwell, vol. 44(8), pages 2238-2283, August.
    20. Koumtingué, Nelnan, 2010. "Proliferation of preferential trade agreements: an empirical analysis," MPRA Paper 68917, University Library of Munich, Germany, revised 08 Aug 2014.
    21. repec:hal:spmain:info:hdl:2441/f4rshpf3v1umfa09lb0k114o5 is not listed on IDEAS
    22. repec:spo:wpmain:info:hdl:2441/f4rshpf3v1umfa09lb0k114o5 is not listed on IDEAS
    23. Marco Fugazza & Frédéric Robert-Nicoud, 2012. "The ‘Emulator Effect’ Of The Uruguay Round On United States Regionalism," UNCTAD Blue Series Papers 51, United Nations Conference on Trade and Development.

    More about this item

    Keywords

    Regional trade agreements; Services; Qualitative choice;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepiie:2015-q4-144-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cepiifr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.