 The interconnections between services and goods trade at the firm-levelAndrea Ariu, Holger Breinlich, Gregory Corcos and Giordano Mion Journal of International Economics, 2019, vol. 116, issue C, 173-188 Abstract: In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms for the period 1995–2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) joint imports are associated with higher firm productivity; iii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to guide our econometric strategy. We use our results to quantify the impact of reductions in goods and services barriers between the US and the EU. Our findings have important implications for the design of trade policy. They suggest that a liberalization of services trade can have direct and sizable effects on goods trade, and vice versa. Moreover, liberalizing goods and services trade jointly brings substantial complementarities. Keywords: Trade in Services; Trade in Goods; Complementarity; Firm-level Analysis; Discrete Choice Models (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:116:y:2019:i:c:p:173-188 DOI: 10.1016/j.jinteco.2018.10.005 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
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