Impact of services liberalization on productivity of manufacturing firms: evidence from Ukrainian firm-level data

Oleksandr Shepotylo and Volodymyr Vakhitov ()

No 45, Discussion Papers from Kyiv School of Economics

Abstract: This paper brings new evidence on the impact of services liberalization on performance of manufacturing firms. Using a unique database of Ukrainian firms in 2001-2007, we utilize an external push for liberalization in services sector as a source of exogenous variation to identify the impact of services liberalization on total factor productivity (TFP) of manufacturing firms. Results indicate that a standard deviation increase in services liberalization is associated with a 9 percent increase in TFP. Allowing services liberalization to dynamically influence TFP through the investment channel leads to even higher effect. The effect is robust to different estimation methods and to different sub-samples of the data. In particular, it is more pronounced for domestic and small firms.

Keywords: services liberalization; productivity; trade (search for similar items in EconPapers)
JEL-codes: F14 G28 L80 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-eff
Note: Submitted to Review of Economics and Statistics
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Impact of services liberalization on productivity of manufacturing firms: evidence from Ukrainian firm-level data (2012)
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