TRADE IN SERVICES IN THE BALTIC STATES: EVOLUTION AND FUTURE PROSPECTS

Mercedes Rodríguez,Yulia Melikhova,José A Camacho

doi:10.3846/20294913.2016.1213203

Mercedes Rodríguez, Yulia Melikhova + Show 1 more

Open Access

https://doi.org/10.3846/20294913.2016.1213203

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Abstract

Trade in services in the Baltic States has traditionally been overlooked. The main objective of this article is to assess the current situation and the future prospects of trade in those services used as intermediate inputs using data from the World Input-Output Database. Unlike previous works we do not only analyze direct trade but also indirect trade, that is, the trade in intermediate services contained in goods. The results show that although traditional services reported major shares in the total volume of intermediate services exports in the Baltic States, other categories of more knowledge-intensive services are gaining importance.

Highlights

In its report entitled “Promoting Trade in Services: Experience of the Baltic States” the OECD (2004: 12) stated that “The Baltic states’ experience in developing the service economy and in promoting their trade in services suggests useful lessons for other countries”. Goswami et al (2011) have recently surveyed the literature on the explanatory factors for service exports underlying the importance of electronic infrastructure, higher education and institutional environment
In this article we employ data from the World Input-Output Database (WIOD) we examine some data from the “Trade in Value-Added and Global Value Chains” statistical profiles published by the World Trade Organization (WTO) (WTO 2016)
These data are in line with the degree of participation of the different Baltic States in global value chains (GVC): while Estonia and to a lesser extent Latvia show a GVC participation index above the average of the developed economies, the index for Lithuania is below the average (WTO 2016)

Summary

Introduction

In its report entitled “Promoting Trade in Services: Experience of the Baltic States” the OECD (2004: 12) stated that “The Baltic states’ experience in developing the service economy and in promoting their trade in services suggests useful lessons for other countries”. Goswami et al (2011) have recently surveyed the literature on the explanatory factors for service exports underlying the importance of electronic infrastructure, higher education and institutional environment. In its report entitled “Promoting Trade in Services: Experience of the Baltic States” the OECD (2004: 12) stated that “The Baltic states’ experience in developing the service economy and in promoting their trade in services suggests useful lessons for other countries”. Goswami et al (2011) have recently surveyed the literature on the explanatory factors for service exports underlying the importance of electronic infrastructure, higher education and institutional environment. Many of these factors are closely related to the creation of “real” knowledge-based economies (Melnikas 2008) and more generally to the transition from the efficiency-driven stage to the innovation-driven stage of development. There are other determinants such as geography. M. Rodríguez et al Trade in services in the Baltic States: evolution and future prospects

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