Service Trade, Regional Specialization, and Welfare

Yuancheng Han, Jorge Miranda-Pinto and Satoshi Tanaka

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: How much does trade in services affect regional production specialization and welfare? Using unique Canadian trade data, we document that the size of inter-provincial service trade is comparable to that of good trade, and that net exports of services are highly correlated with the value-added share of tradable services across provinces. With a spatial model featuring domestic and international trade, we quantify the effects of service trade. Our results highlight that domestic service trade significantly promotes regional specialization, with heterogeneous welfare gains that reduce regional disparities. Conversely, international service trade generates more uniform welfare gains across provinces.

Keywords: service trade; domestic trade; regional specialization; regional disparities; welfare; structural transformation (search for similar items in EconPapers)
JEL-codes: E20 F10 L16 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2023-08
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
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Working Paper: Service Trade, Regional Specialization, and Welfare (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2023-41

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