Comparative Advantage and the Gains from Financial Trade: A Reappraisal

Journal of Economic Integration

2020

The economic effects of information and communication technology (ICT), and particularly the access and use of the Internet (henceforth referred to as "the Internet"), has become the focus of policymakers, researchers, and scholars. Specifically, the development of the services sector due to, among other things, the rapid development of ICT and the Internet, has led economists to recognize the tradability of services, which were long considered a residual and nontradable sector of the economy. This has led to research on the impact of ICT, including the impact of the Internet on trade in services in particular, and on trade performance in general. The rapid development of the services sector is exemplified by statistics. For example, World Trade Organization (WTO) (2019a) reported that in 2018, the volume of world trade in commercial

mentioning

confidence: 99%

Effect of the Internet on Services Export Diversification

Journal of Economic Integration

2020

“…Studies such as Hill (1977) and Morgan and Snowden (2007) have highlighted the existence of differences in goods and services, but according to other works such as Hindley and Smith (1984), these differences do not El Khoury and Savvides, 2006;Dash and Parida, 2013;Gabrielle, 2006;Hoekman and Shingal, 2017;Lorde et al, 2011;Mishra et al, 2011;Thomas, 2019). 7 Studies concerning the determinants of trade in services (notably services exports) include for example Anand et al (2011) Choi (2010); Clarke, 2008;Eichengreen and Gupta (2013a, b); Gnangnon and Iyer, 2018;Freund and Weinhold (2002); Gani and Clemes (2013); Goswami et al (2012); Kandilov and Grennes (2010); Karam and Zaki (2013); Kimura and Lee (2006); Morgan and Snowden (2007); Li et al (2016); Sim (2003, 2005) necessarily apply to trade. This is because thanks to the development of ICT, services have become tradable, and now shared many of the goods characteristics (Bhagwati, 1984;Ghani and Kharas, 2010;Leamer and Storper, 2001).…”

Section: Theoretical Discussion On How Aft Flows Could Affect Servicementioning

confidence: 99%

“…The literature on the determinants of services trade has discussed whether the international trade theory that applies to trade in goods is also valid for services trade. Studies such as Hill (1977) and Morgan and Snowden (2007) have highlighted the existence of differences in goods and services, but according to other works such as Hindley and Smith (1984), these differences do not necessarily apply to trade. This is because thanks to the development of ICT, services have become tradable, and now shared many of the goods characteristics (Bhagwati, 1984;Ghani & Kharas, 2010;Leamer & Storper, 2001).Recent studies such as Kimura and Lee (2006), van der Marel (2012) and Nyahoho (2010) have shown that many of the same basic determinants of goods trade apply also to services trade.…”

Section: Theoretical Discussion On How Aft Flows Could Affect Services Export Diversificationmentioning

confidence: 99%

“…3 The Aid for Trade Global Review, which aims to strengthen the monitoring and evaluation of Aid for Trade to provide strong incentive to both donors and recipients for advancing the Aid for Trade agenda, represents an important forum where the international trade community and the development community could discuss the effectiveness of the AfT flows as well ways to enhance such effectiveness in recipient countries (for further information, see online at: https://www.wto.org/english/tratop_e/devel_e/a4t_e/aid4trade_e.htm) 4 Similarly, the economic impact of services has received relatively less attention compared to that of goods, of goods and services considered together economic impact of services trade (e.g., Alege & Ogundipe, 2015;Balchin et al, 2016;El Khoury & Savvides, 2006;Dash & Parida, 2013;Gabrielle, 2006;Hoekman & Shingal, 2020;Li et al, 2003;Lorde, Francis, & Drakes, 2011;Mishra et al, 2011;Thomas, 2019). 5 Studies concerning the determinants of trade in services (notably services exports) include for example Anand et al (2011) Choi (2010Clarke, 2008;Gupta (2013a, 2013b); Gnangnon & Iyer, 2018;Freund and Weinhold (2002); Gani and Clemes (2013); Goswami, Gupta, and Mattoo (2012); Kandilov and Grennes (2010); Karam and Zaki (2013); Kimura and Lee (2006); Morgan and Snowden (2007); Li et al (2016); Moshirian andSim (2003, 2005); Dash (2014, 2017); Sandra and Pelin (2012); Shingal (2010); Sapir and Lutz (1981); Sandeep (2011);Wong, Tang, and Fausten (2009). 6 Studies on these matter include for example…”

Section: Orcidmentioning

confidence: 99%

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Aid for Trade and services export diversification in recipient countries

Australian Economic Papers

2020

This article examines the effect of Aid for Trade (AfT) flows on services export diversification in recipient-countries. The empirical analysis has relied on a sample of 100 recipient-countries (of which 31 Least developed countries-LDCs) over the period 2002-2014 and used the two-step system Generalized Methods of Moments (GMM) approach. It shows that total AfT flows always exert a positive effect on services export diversification over the full sample, with the magnitude of this positive effect being higher for less advanced countries such as LDCs than for relatively advanced economies. This finding also applies to the effect of the cumulated AfT flows on services export diversification. However, we find that the components of total AfT flows-namely AfT for services sectors and AfT for non-services sectors-exert a higher positive effect on services diversification in less advanced countries, notably LDCs than in relatively advanced countries. Specifically, for countries whose real per capita income exceed a certain level, these two types of capital inflows are associated with greater services export concentration. These findings have important policy implications for developing countries and notably the poorest countries among them.

“…The literature on the determinants of services trade has discussed whether the international trade theory that applies to trade in goods is suitable for analyses concerning trade in services. Studies such as Hill (1977) and Morgan and Snowden (2007) have pointed out that there exist some differences between goods and services, but other works such as Hindley and Smith (1984) have emphasized that these differences do not necessarily apply to trade. This is because thanks to the development of ICT, services have become tradable, and now shared many of the goods characteristics (Ghani and Kharas, 2010;Leamer and Storper, 2001).…”

Section: Services Export Diversification (Concentration) and Economicmentioning

confidence: 99%

Services Export Diversification and Economic Growth

2020

Preprint

The present article investigates the effect of services export diversification on economic growth by relying on a sample of 131 countries over the period 1985-2014. The empirical results, based on the two-step system Generalized Methods of Moments (GMM), has suggested that services export diversification enhances economic growth in developing countries, whereas in High Income Countries (HICs), services export specialization promotes economic growth. Furthermore, services export diversification enhances economic growth as countries experience a rise in their services exports growth, with the magnitude of this positive effect increasing as the growth rate of services exports rises. Finally, services export diversification tends to be positively associated with economic growth, but as countries enjoy greater trade openness, they tend to enhance their services export specialization so as to enjoy higher economic growth. Interestingly, it is services export specialization that promotes economic growth as countries better integrate into the international trade market. One key message conveyed by the analysis is the importance of services export diversification (or concentration) for economic growth, including when countries further open up to international trade.