Trade Effects of the European Union's Service Directive: Contrasting<i>ex ante</i>Estimates with Empirical Evidence

Dettmer, Bianka

doi:10.1111/twec.12149

Cited by 6 publications

(12 citation statements)

References 74 publications

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“…The effect of the directive on product growth should be indirect via trade and FDI (Dettmer, 2015), or, more broadly speaking, the effect of liberalization on productivity should come through trade via economies of scale, specialization, knowledge and technology diffusion (Badinger and Maydell, 2009;Frankel and Romer, 1999), imitation and organization spill-overs (Monteagudo et al, 2012), improving allocation efficiency that forces companies into improving their productivity (model implemented by De Bruijn et al, 2008), and greater competition which lowers prices, increases productivity and supports efficient allocation (Dettmer, 2015). Overall, Corugedo and Ruiz (2014) call increased productivity due to increased competition a domestic transmission channel.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Unlike the initial proposal, the agreed directive did not include the CoOP, incorporates a long list of exceptions and several others provisions (Dettmer, ; Timmerman, ) such as non‐discrimination by the country of establishment (Dettmer, ), and it is said to be weak overall because it does not forbid restrictions on free movement, but rather suggests countries re‐evaluate them and allow only those that are in the general interest (Corugedo and Ruiz, ). According to Delgado () the directive mainly accounts for freedom of establishment of service providers, freedom of trade in services and minimal levels of consumer protection.…”

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

“…Nowadays there is a vast literature concerning the effects of the Services Directive, mainly focusing on trade, but also on other aspects of economics. The literature focuses largely on the potential impact on intra‐EU trade and FDI, computing the general equilibrium and the effects of the country‐of‐origin principle (Dettmer, ).…”

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

“…The only paper known to the author researching the ex‐post effects of the directive focuses on the effects of bilateral macroeconomic trade and uses a diff‐in‐diff‐in‐diff research design. Dettmer () calculates the diff‐in‐diff estimator where the treatment variable is equal to one if two countries are members of EU and the time is after treatment occurred. In addition, the diff‐in‐diff‐in‐diff estimator adds the condition of whether the countries have liberalized trade or not.…”

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

“…The European Union has achieved many successes in the area of the Single Market but until recent years these were primarily in the domain of the free movement of goods (Dettmer, ), which is easier to grasp and to deal with. The free movement of services, the second element of the Single Market, had been left significantly behind up to the beginning of the 21st century when the heterogeneous environment of services began to be noticed and targeted.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Empirical Evidence of the Introduction of the Services Directive on Microeconomic Productivity

Olbrecht

2018

J of Common Market Studies

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The Services Directive puts into motion the free movement of services, one of the milestones of the Single Market of the European Union. Though very ambitious in its draft version, several adjustments have been made and it is being questioned whether the final Directive is helpful at all. This article aims to answer the question by focusing on the productivity of affected companies from retail and the wholesale trade sector with the use of two distinct control groups and employing difference‐in‐difference‐in‐differences design on firm‐level data. The article finds that the Services Directive has significantly increased the productivity of companies though the results cannot be labelled as profoundly causal, as is further discussed in the article.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

Section: Development Of the Services Directive: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Empirical Evidence of the Introduction of the Services Directive on Microeconomic Productivity

Olbrecht

2018

J of Common Market Studies

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The political economy of the European Union

2020

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The European Union (EU) currently faces many challenges. The departure of the United Kingdom in early 2020 means that for the first time in its history, it lost rather than gained a member state. Several of its member states still struggle with the long-term consequences of the financial and economic crisis that started back in 2008. The economic impact of the Covid-19 crisis is likely to further strain the economies of the EU's member states. The backlash to globalization that characterizes much of the developed world in the twenty-first century imposes limits on the EU's ability to advance its trade policy agenda. Last but not least, Euroscepticism has taken hold across many EU member states, carried by populist parties that have seen their electoral fortunes improve over the past few years.It is against this background that this special issue advances research on the political economy of the EU. Political economy research investigates the interaction between politics and economics, that is, how political factors influence economic outcomes such as trade or economic growth and how economic outcomes affect politics. Both economists and political scientists contribute to this field of research, with the former mainly focusing on the impact of politics on economic outcomes, and the latter mainly interested in the effect of economic outcomes on politics. Economists, for example, ask: What are the economic gains from European integration and, specifically, from the EU customs union and European Monetary Union? To what extent are EU policies able to foster market efficiency and could some of these policies distort markets? What political economy mechanisms are at work at European institutions? Political scientists studying the political economy of the EU address questions such as: How has the Euro crisis affected the process of European integration? Can the EU use its extensive trade ties with third countries to reach broader foreign policy goals such as the enforcement of labor rights or environmental regulation? To what extent can the distributional effects of European integration explain Euroscepticism?

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Cutting red tape for trade in services

2021

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International trade is hampered by a variety of administrative barriers (Bratt, 2017;Carrère & Melo, 2011a). These hurdles seem to persist even when countries form regional trade agreements (RTAs;Hornok & Koren, 2015). Several studies show that a reduction in administrative barriers increases trade volumes (Carrère & Melo, 2011b;Engman, 2005), which motivated the members of the World Trade Organization (WTO) to sign the Trade Facilitation Agreement (TFA; WTO, 2014). However, the majority of WTO agreements, RTAs and the TFA focus on trade in goods. In contrast, the General Agreement on Trade in Services (GATS, 1995), also signed by the WTO members, provided only very little progress in terms of reducing administrative barriers regarding service trade (Adlung & Roy, 2005;Hoekman & Mattoo, 2013;Mustilli & Pelkmans, 2013). Administrative hurdles are especially problematic in the case of services, because the main impediments to trade are not tariffs or shipping costs, but regulations and entry barriers for service providers (Baldwin, 2011). Furthermore, only one per cent of RTAs signed between 1950 and 2010 target services specifically, and more than half of the almost 600 agreements do not even mention services (Dür et al., 2014). Services are in many countries highly regulated, and the access to service markets is often restricted, that is, via licence and qualification requirements, entry quotas or even discriminatory regulations regarding the nationality and residence. Since restrictions for the same service differ between countries, a service exporter needs to fulfil country-specific regulations for each and every host market (OECD, 2018).These issues exist even in highly integrated markets, like the European Union (EU;Felbermayr & Jung, 2011;Mustilli & Pelkmans, 2012). Kox and Lejour (2006) argue that the principle of free movement of services in the EU is still far from being complete. The heterogeneity in regulation and rulesThis is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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Trade Effects of the European Union's Service Directive: Contrastingex anteEstimates with Empirical Evidence

Cited by 6 publications

References 74 publications

Empirical Evidence of the Introduction of the Services Directive on Microeconomic Productivity

Empirical Evidence of the Introduction of the Services Directive on Microeconomic Productivity

The political economy of the European Union

Cutting red tape for trade in services

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