Trading firms and trading costs in services: Firm-level analysis

Abstract

This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD countries. The publication of this document has been authorised by Ken Ash, Director of the Trade and Agriculture Directorate This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. This document has been declassified on the responsibility of the Working Party of the Trade Committee under the OECD reference number TAD/TC/WP(2016)19/FINAL.

Investment Facilitation and Mode 3 Trade in Services: Are Current Discussions Addressing the Key Issues ?

“…More importantly, the data reveal the extent to which foreign affiliates supply services for the host market or for export, highlighting that a growing proportion of their output is exported. This is an important finding, as it suggests that successful efforts at investment facilitation, attraction and retention can generate growth-inducing export gains (Rouzet et al, 2017).…”

Services trade and labour market outcomes

“…5 Against this background, the effect of higher services trade on employment and earnings may be relatively more important in larger firms, conditional on their skill mix. Services trade liberalisation and sizeable changes to global demand on the other hand may enable easier market access for SMEs (Rouzet, Benz, & Spinelli, 2017). This could enhance the productivity or size expansion of those firms, with corresponding benefits regarding the labour demand of such firms.…”

Services trade costs in the United States: A simulation based on the OECD Services Trade Restrictiveness Index

“…In the fourth column, the elasticity for financial services is the simple average of financial services (1.51) and auxiliary financial (2.59). The estimates rely on firm-level data on profit margins from the United Kingdom and Finland (Rouzet, Benz and Spinelli, 2017), sector-level data on trade and unit labour costs from a set of 41 countries covered in the WIOD database (Egger et al, 2020), firm-level data on profit-margins from Austria (Christen, Pfaffermayr and Wolfmayr, 2019), firm-level data on profit-margins from Germany (Blank et al, 2018) and sector-level data on unit labour costs from a set of 59 economies covered in the OECD TiVA database (Fontagné, Orefice and Santoni, 2019).…”

“…It measures the restrictiveness of services trade barriers on a scale from zero to one, with zero being most liberal and one being most restrictive. Existing estimates show that these barriers are important determinants of global cross-border services trade patterns, but they also have an impact on downstream manufacturing sectors (Benz, 2017;Nordås and Rouzet, 2017;Rouzet, Benz and Spinelli, 2017). Updated on an annual basis, the STRI currently covers 46 countries, 22 sectors and six years (2014-2019) 3 .…”