Quantifying the costs of regulatory barriers to trade in services: New estimates of ad valorem equivalents based on the OECD STRI

Sebastian Benz and Alexander Jaax

No 333096, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper exploits information from the OECD Services Trade Restrictiveness Index (STRI) for the period of 2014-2016 to estimate ad valorem equivalents (AVEs) of services trade barriers for 44 countries. Drawing on longitudinal data on regulatory measures affecting cross-border trade in services, our econometric approach controls for multilateral resistance terms and time fixed effects. We also control for the depth of services provisions in bilateral agreements. AVEs are computed for 5 services sectors, with a new dataset on regulatory barriers within the European Economic Area (EEA) allowing for the additional calculation of AVEs for services trade between EEA member countries. Results indicate that the median AVE for trade in financial services is around 130% and around 100% for communication, business services and transport services. Within the EEA, median AVEs for all four sectors lie between 20% and 30%. Trade costs in insurance services are somewhat lower, the median being 5% within the EEA and 60% for other country pairs.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333096

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