Business services outsourcing and economic growth: Evidence from a dynamic panel data approach
Bianka Dettmer ()
No 2012-049, Jena Economics Research Papers from Friedrich-Schiller-University Jena
Innovations in information- and telecommunication technology render the proximity requirement between business partners obsolete and make business service outsourcing via cross-border trade more feasible. Although the (service-led) growth prospects have been widely discussed, evidence at the country level is scarce. In this paper, we evaluate the effect of openness to trade commercial- and specialized business services on long-run growth by applying a dynamic panel data approach to account for unobserved country specific effects and endogenous growth determinants. The system GMM estimates validate that a long-run growth effect for countries taking part in the outsourcing process of producer services exists. The growth effect is significantly stronger in a sample of Non-OECD countries and suggests a kind of catching-up process. Evidence from two stage least square indicate that the impact of professional service regulation on long-run growth work rather indirectly through trade flows.
Keywords: international trade; business services; growth; system GMM (search for similar items in EconPapers)
JEL-codes: F12 F15 L84 O41 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2012-049
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