The role of services in globalisation

Timon Bohn, Steven Brakman and Erik Dietzenbacher

The World Economy, 2018, vol. 41, issue 10, 2732-2749

Abstract: This paper explores the role of services in international trade and global value chains, and adds to our knowledge on recent trends in globalisation. We employ indicators for trade in value‐added (VA) and for gross exports, and address the following two questions: (i) has trade of VA in services (i.e., the VA created by domestic service industries and embodied in foreign consumption of final products) grown more than trade of VA in manufacturing; and (ii) does trade of VA in services travel further than trade of VA in manufacturing. Based on the World Input‐Output Database (WIOD), we find, in general, that for the period 2000–14, the share of services in exports of VA grew over time, whilst the share of manufacturing remained constant (or grew relatively less). Second, throughout the entire period, services had a larger share in interregional exports of VA than in intraregional exports of VA, whilst the opposite was true for manufacturing. Services were thus more global than manufacturing.

Date: 2018
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