Shedding light on the drivers of services tradability over two decades

Sebastian Benz, Alexander Jaax and Yoto Yotov
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Alexander Jaax: OECD

No 264, OECD Trade Policy Papers from OECD Publishing

Abstract: Services have become significantly more tradable in the first two decades of the 21st century. This paper documents that trade costs for financial services, communication services and business services fell by between 30% and 60% between 2000 and 2019. Information and communication technology and growth of air traffic have acted as key drivers of this development. While there is some variation across sectors, the analysis suggests that these two determinants jointly account for a quarter to half of the aggregate decline in trade costs for services during this 20-year period. Furthermore, services provisions in regional trade agreements (RTAs) can explain between 3% and 14% of the reduction in trade costs for communications services and financial and insurance services. These findings demonstrate the importance of whole-of-government strategies to promote services trade competitiveness, inter alia market access, regulatory reform, as well as investment in physical and digital infrastructure and adoption of new technologies.

Keywords: Digital trade; Digitalisation; Services trade; Trade costs; Trade liberalisation; Trade policy (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F68 O33 (search for similar items in EconPapers)
Date: 2022-10-20
New Economics Papers: this item is included in nep-ict and nep-int
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:264-en

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