Abstract
This study tests for the Granger causal relationship between China's export facilitation and comparative advantage in services. We employ net export ratio (NX) to capture the changing export facilitation, and use revealed symmetric comparative advantage index (RSCA) to measure the comparative advantage. Using annual panel data for eleven categories of service trade across 1982 to 2011, we perform heterogeneous panel co-integration tests and panel Granger causality tests. We document empirical evidences that 1) the comparative advantage exerts no influence upon the net export ratio of China’s trade in services; 2) the net export ratio Granger cause the comparative advantage in both short-run and long-run; and 3) China’s service export facilitation hurts the comparative advantage in the short-run, but the long-run effect is positive. Our findings shed new light on the understanding of the Chinese strategic trade policy in services trade.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call