Dark Costs, Missing Data: Shedding Some Light on Services Trade

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract A structural gravity model is used to estimate barriers to services trade across many sectors, countries and time. Since the disaggregated output data needed to flexibly infer border barriers are often missing for services, we derive a novel methodology for projecting output data. The empirical implementation sheds light on the role of institutions, geography, size and digital infrastructure as determinants of border barriers. We find that border barriers have generally fallen over time but there are differences across sectors and countries. Notably, border effects for the smallest economies have remained stable, giving rise to a divergent pattern across countries. Terms of use: Documents in EconStor mayJEL-Codes: F130, F140, F160.

Cutting red tape for trade in services

“…Anderson and Van Wincoop (2004) discuss the difficulty of measuring and collecting reliable data on trade costs regarding trade in goods. For service trade, this becomes even more challenging, because trade costs for services are very specifically related to their industry characteristics (Anderson et al, 2015;Borchsenius et al, 2010;Francois & Hoekman, 2010). Since we 7 For instance, Kelle et al (2013) record that in 2005 only 85 out of 2,212 German service exporting firms chose Mode 3 as their export channel.…”

“…This is mainly due to the higher volume of trade in goods, but also due to limited data availability for trade in services. Yet, in the last years more and more authors have shown that the standard gravity equation is also suitable for trade in services (e.g., Anderson et al, 2015;Ceglowski, 2006;Egger et al, 2012;Francois et al, 2007;Head et al, 2009;Kimura & Lee, 2006;Nordås, 2018;Walsh, 2006). However, the most difficult task for an analysis of trade relations is still the measurement of trade costs t ij .…”

Services trade in the United Kingdom and the global economy

“…The empirical strategy employed to convert the information in the STRI database into Ad Valorem Equivalents (AVEs) is based on a gravity model. Traditionally used to analyse patterns of trade in goods, gravity models have also been widely applied to cross-border trade in services (Eaton and Kortum, 2018;Nordas and Rouzet, 2017;Van der Marel and Shepherd, 2013;Anderson et al, 2015).…”

Services trade costs in the United States: A simulation based on the OECD Services Trade Restrictiveness Index

“…The empirical strategy employed to convert the information in the STRI database into AVEs is based on a gravity model, the workhorse model of the empirical trade literature. Traditionally used primarily to analyse patterns of trade in goods, gravity equations have also been widely applied to cross-border trade in services (Eaton and Kortum, 2018;Nordås and Rouzet, 2017;Van der Marel and Shepherd, 2013;Anderson et al, 2015). Formally, the gravity model can be expressed as follows:…”