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FINANCIAL AND INSURANCE SERVICES TRADE: DOES EXCHANGE RATE OR INCOME MATTER?
Author(s) -
Cheng Ka Ming
Publication year - 2021
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12943
Subject(s) - financial services , exchange rate , economics , competition (biology) , business , product (mathematics) , service (business) , international economics , finance , economy , ecology , geometry , mathematics , biology
This paper aims to investigate the impacts of exchange rate and income changes on financial and insurance services trade by utilizing the quarterly bilateral trade data of the United States and its major trading partners from 2003 to 2017. No long‐run exchange rate effects on imports and exports of insurance services trade are found. The impact of exchange rates on insurance services may be weak since competition among service providers depends on product differentiation than on exchange rates. On the contrary, income demonstrates significant impacts on both financial and insurance services trade in the United Kingdom, Canada, Japan and Australia. ( JEL C22, F14, G20)