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The Impact of Services Trade Restrictiveness on Trade Flows: First Estimates

This paper uses newly released OECD data on services trade restrictions (STRI) to analyse the relationship between services trade restrictions, cross-border trade in services and trade in downstream manufactured goods. A standard gravity model is enhanced by the STRI indices in a cross-section regression analysis. Services trade restrictions are negatively associated with both imports and exports of services. The surprisingly strong effect on services exports is probably explained by a negative relationship between the STRIs and sector performance indices. Consequently, services suppliers are less competitive abroad. A negative relationship is also found between the STRI indices and exports, imports and intra-industry trade in manufactured goods. The statistical significance and the elasticities vary across services and goods sectors in ways that intuitively make sense.

Additional Info

  • Type: Working Paper
  • Sector: General
  • Special Focus: Domestic Regulation
  • Geographical Level: National
  • Published by: OECD - Organisation for Economic Co-operation and Development
  • Language: English