International Mobility of Services are Developing Countries Competitive?

Abstract

Developing countries are quite resistant to increase the access of foreign service providers to their markets. They are afraid potentially better access to other countries’ market will not by used by them efficiently, because their service exporters are not competitive enough. While service industries are indeed often inefficient and underdeveloped in domestic economies in low and middle income countries, it does not have to be necessarily true that they do not participate successfully in services exports already. It depends on how one measures the country’s competitiveness. The paper deals with three indices: observed and so called adjusted exports share and Revealed Comparative Advantage. Countries’ openness to services trade is also presented as a complementary measure. The results show that the popular measure of country’s participation in world exports (observed exports share) understates the position of developing countries in services exports. Both the results of the paper and the literature survey indicate that there are many opportunities for developing countries in increasing number of service sub-sectors