Services productivity, trade policy and manufacturing exports
World economy, 2017, Vol. 40, No. 3, pp. 499–516 [Global Governance Programme], [Global Economics]
HOEKMAN, Bernard M., SHEPHERD, Ben, Services productivity, trade policy and manufacturing exports, World economy, 2017, Vol. 40, No. 3, pp. 499–516 [Global Governance Programme], [Global Economics] - http://hdl.handle.net/1814/39053
Retrieved from Cadmus, EUI Research Repository
This paper analyses the linkage between services and manufacturing productivity performance, using firm-level data for over 100 developing countries. We find strong evidence for such a linkage, although the effect is small: at the average rate of services input intensity, a 10 per cent improvement in services productivity is associated with an increase in manufacturing productivity of 0.3 per cent. Services trade restrictiveness indices are found to be a statistically significant determinant of manufactured exports performance, a finding that is robust to the inclusion of the overall level of trade restrictiveness that is applied against manufactured exports directly. The main channel through which services trade restrictions negatively affect manufactured exports is through FDI, a finding that is consistent with the stylised fact in the literature that FDI is a key channel for trade in services and an important vehicle through which services technology and know-how is transferred across countries. At the sectoral level, restrictions on transport and retail distribution services have the largest negative impact on exports of manufactures.
Article first published online: 22 SEP 2015
Cadmus permanent link: http://hdl.handle.net/1814/39053
Full-text via DOI: 10.1111/twec.12333
Series/Number: [Global Governance Programme]; [Global Economics]
Initial version: http://hdl.handle.net/1814/34305
Version: Published version of EUI RSCAS WP 2015/07 Global Governance Programme-156
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