The Tradability of Services: Geographic Concentration and Trade Costs

Antoine Gervais and J. Jensen ()

No WP15-12, Working Paper Series from Peterson Institute for International Economics

Abstract: In this paper, we use a unique dataset on the distribution of output and demand across regions of the United States to estimate trade costs for 969 service and manufacturing industries. Our estimation method is a natural extension of the gravity model of trade and identifies trade costs in the absence of trade data. The estimated trade costs are higher on average for service industries, but there is considerable variation across industries within sectors. Using the trade cost estimates, we classify industries into tradable and nontradable categories. We find that accounting for tradable service industries nearly doubles the international exposure of the US economy, tradable services value added is unevenly distributed across geographical regions, labor productivity and wages are higher on average for tradable industries, and potential welfare gains from trade liberalization in the service sector are sizable.

Keywords: Service sector; international trade; trade costs; monopolistic competition (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The tradability of services: Geographic concentration and trade costs (2019)
Working Paper: THE TRADABILITY OF SERVICES: GEOGRAPHIC CONCENTRATION AND TRADE COSTS (2014)
Working Paper: The Tradability of Services: Geographic Concentration and Trade Costs (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:iie:wpaper:wp15-12

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