DETERMINANTS OF SOUTH AFRICA‐US INTRA‐INDUSTRY TRADE IN SERVICES: A WILD BOOTSTRAP DYNAMIC PANEL DATA ANALYSIS¹

Abstract

The study attempts to empirically identify factors that determine South Africa-US intra-industry trade (IIT) in selected services during the period 1994-2002. The study utilises Liu-DavidsonFlachaire wild bootstrap, which is robust to heteroscedasticity and provides estimates of the degree of parameter bias. The empirical results, in principle, show that South Africa-US IIT in the selected services is determined by factors similar to goods-based "North-South" IIT studies. Specifically, differences in per capita income and differences in market size negatively affect IIT. The study also indicates that US foreign direct investment in South Africa positively contributes to the unaffiliated IIT in services.

Impact of devaluation on service sector exports in Saudi Arabia: non-linear ARDL approach

“…Sichei et al (2007) also corroborate the positive effect of devaluation on the intra-service sector trade of South Africa and the USA. They argue that devaluation of Rand in South Africa was helpful in enhancing of the competitive position of service sector trade, and it remained as such in increasing the service sector exports in turn.…”

What Explains China's Rising Trade in Services?

“…It would be better to use a direct measure of bilateral trade liberalization (barriers), such as the Hoekman frequency index or the trade restrictive index. Third, a new econometrics method, such as the bootstrap dynamic panel data or the vector autoregression model, should be used to test the robustness of the model (Sichei et al 2007). Since trade in services and trade in goods may have two-way effects, new econometric methods should be utilized to deal with any endogeneity problem.…”

Horizontal Intra-Industry Trade in Korea: A Dynamic Panel Data Analysis

“…), while industry-specific studies explain IIT as a function of industry-specific variables (e.g., scale economies, product differentiation, the firm concentration ratio, etc.). In seeking to empirically analyze the patterns and determinants of IIT, some studies have focused on country-specific determinants (e.g., Zhang et al, 2005;Zhang and Li, 2006), while others have focused on industry-specific factors (e.g., Vogiatzoglou, 2005;Algieri, 2007), with few studies focusing on both types of determinants (e.g., Bernhofen and Hafeez, 2001;Sichei et al, 2007). Stone and Lee (1995) investigated the impact of five factors, namely tastes, scale economies, transaction costs, trade orientation, and trade imbalances, on IIT.…”