The Impact of Services Trade Restrictiveness on Food Trade

Abstract

International trade in goods requires service inputs such as transport, banking and financial services for production and transportation. Trade in goods and services are now closely linked and contribute to the growth of international trade. The goal of this study is to investigate the effects of restrictions in the banking, accounting, transportation and logistics sectors (cargo handling and custom brokerage) on food trade. We use a gravity model with panel data from 2014 to 2018 for 36 OECD countries, the OECD indices of individual country restrictions and regulatory difference by country pair to capture the level of restrictions in these sectors. Our results suggest that importing and exporting country restrictions have non-significant effects on aggregate food exports, but negative and significant impacts on exports of agricultural raw materials and perishable products (meat, dairy products, eggs, etc.). The regulatory disparity between countries in logistics and banking sectors emerge as the main barrier for food exports. However, these results can be mitigated through regulatory cooperation or harmonization of regulations.

The effects of restrictive measures on cross‐border investment: Evidence from OECD and emerging countries

“…However, during this period, global restrictive measures and those in the secondary sector are negatively and significantly associated with FDI across OECD countries. The effects in the secondary sector refer to the existing literature on the effects of restrictions in services on the performance of manufacturing firms (Ariu et al, 2019, 2020; Zongo, 2021). Indeed, restrictions on FDI in services have an impact on the productivity of manufacturing firms (increased costs of sourcing services) as they increasingly use services as an important input of manufacturing value added.…”