Linder hypothesis revisited: Does it hold for services trade?

Dahai Fu, Yakun Chen and Ying Zhang

Economics Letters, 2020, vol. 195, issue C

Abstract: This article examines how differences in the income level and income inequality of trading partners impact their bilateral trade in services. Results show that the Linder hypothesis holds at the aggregate level. Both similar levels of per capita income and income inequality in two countries increase services trade. However, the precise impact varies with the particular service sector, which highlights the importance of addressing the heterogeneity of service sectors.

Keywords: Linder hypothesis; Services trade; Income level; Income inequality (search for similar items in EconPapers)
JEL-codes: F14 L80 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:195:y:2020:i:c:s0165176520302883

DOI: 10.1016/j.econlet.2020.109469

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