Services Trade Restrictiveness and Manufacturing Productivity: The Role of Institutions

Abstract

The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Professor Brigid Laffan, aims to develop inter-disciplinary and comparative research on the major issues facing the process of European integration, European societies and Europe's place in 21 st century global politics. The Centre is home to a large post-doctoral programme and hosts major research programmes, projects and data sets, in addition to a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration, the expanding membership of the European Union, developments in Europe's neighbourhood and the wider world.

Trade Agreements, Regulatory Institutions and Services Liberalization

“…It is well known that the magnitude of the net benefits from liberalizing trade in goods depend on country-specific conditioning factors, including the quality of local governance institutions (Ahsan, 2013;Rodriguez and Rodrik, 2001). Beverelli et al (2017) confirm this, finding that the positive effect of lower services trade barriers is strongly dependent on the quality of governance in countries. Beverelli et al (2017) confirm this, finding that the positive effect of lower services trade barriers is strongly dependent on the quality of governance in countries.…”

“…This embodies most of what had been agreed in the TPP, with the notable exception of specific provisions where the US had been the major demandeurmostly in the area of protection of intellectual property. In Beverelli et al (2017) the marginal effect of lowering services trade restrictions increases with the quality of regulation (l\0) and is significantly positive (at a 0.05 per cent level of statistical significance) for 65 per cent of the sample observations. 3.…”

“…The empirical casefound by Beverelli et al (2017) of manufacturing productivity increasing with lower services trade restrictions corresponds to a positive value for À d dy dCSTRI while a negative value forl reveals that such a positive effect of liberalization is increasing in the quality of economic governance in the liberalizing country. The empirical casefound by Beverelli et al (2017) of manufacturing productivity increasing with lower services trade restrictions corresponds to a positive value for À d dy dCSTRI while a negative value forl reveals that such a positive effect of liberalization is increasing in the quality of economic governance in the liberalizing country.…”

“…In order to estimate the role of domestic governance in shaping the effect of services trade liberalization on downstream manufacturing we use the following model from Beverelli et al (2017):…”

“…Complete removal of FDI restrictions is perhaps an extreme example that may not be achievable in practice, but the goal of the exercise is to identify potential impacts of ambitious liberalization. First, equation (1) is fitted with the estimation sample of Beverelli et al (2017) augmented with additional data points for the US. Thus, estimation of the overall net GDP effects from removing services trade restrictions is precluded, and the magnitude of the sectoral estimates will be upper bounds.…”