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Regional Liberalisation of Trade in Services
Author(s) -
Park Innwon,
Park Soonchan
Publication year - 2011
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2011.01350.x
Subject(s) - trade in services , liberalization , goods and services , business , trade diversion , international economics , international trade , regional trade , economics , gravity model of trade , financial services , trade creation , developing country , regression analysis , trade barrier , free trade , international free trade agreement , finance , economic growth , economy , statistics , mathematics , market economy
This paper investigates quantitatively the trade‐enhancing effect of regional trade agreements (RTAs) under the General Agreement on Trade in Services Article V (services RTAs) by applying a gravity regression analysis to four major services sectors – financial, business, communication and transportation services – while controlling for both country‐specific and time‐varying importer and exporter fixed effects. The regression analysis covers bilateral imports in services consisting of 20,986 country‐pairs in total over six years (2000–05). Our results indicate that sector‐specific trade‐creating effects of services RTAs are significantly positive without incurring trade‐diverting effects, excluding transportation services. Moreover, we find that there is a significant cumulative effect of services RTAs, excluding communication services and a complementary relationship between goods and services imports. In addition, the trade‐creating effect of services RTAs is stronger between developed members compared with between developed and developing countries.