Barriers to Trade in Financial and Insurance Services: Evidence from the United Kingdom

Jiri Podpiera

No 2021/260, IMF Working Papers from International Monetary Fund

Abstract: Distance, as a proxy for trade barriers, is found in many studies to matter even for weightless cross-border financial investments and lending, possibly due to the presence of information asymmetries. Its importance is tested in this paper using exports of all five broad categories of the U.K.’s financial and insurance services. No trade barriers are found for the bulk of the U.K.’s exports. Trade barriers are confirmed only for interest-bearing activities – being in line with available results in the literature. The positive effect of EU membership appears to be small. Notwithstanding the uncertainties, it suggests that post-Brexit disruptions of the U.K.’s export of financial and insurance services may be minor.

Keywords: Export; Gravity Model; Financial Services; Insurance; Censored Regression; insurance service; A. financial services; U.K.'s export; evidence from the United Kingdom; U.K.'s export value; Exports; Trade barriers; Service exports; Global; export of financial service; export destination country population; EU membership; services from the U.K. (search for similar items in EconPapers)
Pages: 21
Date: 2021-10-29
New Economics Papers: this item is included in nep-cwa, nep-fdg, nep-ias and nep-int
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