Trade In Commercial Services Research Articles

INTERNATIONAL TRADE TRENDS IN TERMS OF CORONARY CRISIS

The year 2020 іs characterized by one of the largest declines in international trade and output volumes. This paper primarily aims to explore vectors of influence of the coronary crisis on the dynamics and structure of international trade based on combinatorial approach which included calculation of quantitative indicators of world trade within countries and regions and estimation of qualitative parameters of government support of business in conditions of COVID-19. The empirical findings indicate: the coronavirus pandemic has resulted in an 8% decline in merchandise trade and a 21% reduction in commercial services trade in 2020; the rate of decline turned out to be different in countries, which led to an increase in the unevenness of export and import supplies; the application of protectionist measures by the governments of many countries is the expected response to the spread of the COVID-19; supply chains came under pressure early in 2020 but were an instrument in supporting the resumption of economic activity. The current paper reveals that international trade will serve as the basis for sustainable growth of the world economy both in 2022 and beyond.

Decomposing International Trade in Commercial Services

To delve deeper into the rise of trade in commercial services as the most important determinant of the recent increase in digital trade, this article offers a decomposition of international service trade using the latest release of the Inter-Country Input–Output (ICIO) tables. The analysis decomposes international service trade into a split between (a) direct services exports and services embodied in goods, (b) advanced economies and the major emerging markets, and (c) the major commercial services industries. We show that overall direct service exports have become more important relative to services embodied in goods, especially in advanced economies (the ‘cross-border’ effect). Further, we show that for emerging markets, the rise of the exports of services comes from the increase in volume of export of goods, which embed services and not because of an increased share of services embodied in the domestic value of exported goods (the ‘embodied volume’ effect). Finally, we show that the increase in services trade can be attributed to the increase in traded information technology (IT) services and not so much to that in financial and business services that are increasingly traded digitally across borders (the ‘plain vanilla digitalisation’ effect).JEL Codes: F14, F15, G20

Accounting for Cloud Computing in the National Accounts

Digitalization and the innovative use of digital technologies is changing the way we work, learn, communicate, buy and sell products. One emerging digital technology of growing importance is cloud computing. More and more businesses, governments and households are purchasing hardware and software services from a small number of large cloud computing providers. This change is having an impact on how macroeconomic data are compiled and how they are interpreted by users. Specifically, this is changing the information and communication technology (ICT) investment pattern from one where ICT investment was diversified across many industries to a more concentrated investment pattern. Additionally, this is having an impact on cross-border flows of commercial services since the cloud service provider does not need to be located in the same economic territory as the purchaser of cloud services. This paper will outline some of the methodological and compilation challenges facing statisticians and analysts, provide some tools that can be used to overcome these challenges and highlight some of the implications these changes are having on the way users of national accounts data look at investment and trade in commercial services.

Accounting for Cloud Computing in the National Accounts

Digitalization and the innovative use of digital technologies is changing the way we work, learn, communicate, buy and sell products. One emerging digital technology of growing importance is cloud computing. More and more businesses, governments and households are purchasing hardware and software services from a small number of large cloud computing providers. This change is having an impact on how macroeconomic data are compiled and how they are interpreted by users. Specifically, this is changing the information and communication technology (ICT) investment pattern from one where ICT investment was diversified across many industries to a more concentrated investment pattern. Additionally, this is having an impact on cross-border flows of commercial services since the cloud service provider does not need to be located in the same economic territory as the purchaser of cloud services. This paper will outline some of the methodological and compilation challenges facing statisticians and analysts, provide some tools that can be used to overcome these challenges and highlight some of the implications these changes are having on the way users of national accounts data look at investment and trade in commercial services.

The Impacts Of Covid-19 On Global Trade

As the coronavirus emerged in china and spread, globally, authorities have acted to limit its spread. Experience with similar diseases reveals that while the human costs are significant, the bulk of the economic costs are due to the preventive behaviour of individuals and the transmission control policies of governments. Meanwhile, the dollar value of world merchandise exports in 2019 fell by 3% to US $18.89 trillion. In contrast, world commercial services trade increased in 2019, with exports in dollar terms rising by 2% to US $ 6.03 trillion. Early indications of the economic costs and the magnitude of estimated impacts demonstrate the need for a co-ordinated international response to the crisis. A global crisis requires a global response and there is a need for global collaboration not just on health, but also on trade, finance and macroeconomic policies.

The us Role in International Services Trade

The paper illustrates the role of US in international trade with focus on services. Over the last decades the services sector has gained in international trade and the world economy, making more opportunities for the production, productivity, employment. While protectionist turn in the United States is intensifying uncertainty in the world economy, commercial services trade shows increase. After world services exports fell in 2015, and was restoring after, in 2017 it was up to 5,3 trillion dollars, with US leading. The US exports in services is characterized by high concentration in several countries, including Great Britain, Canada, Japan, China. Meanwhile the main country importing travel services from the US is China, Mexico, Canada. By type of services travel is accounted for the largest part of both exports and imports. The highest surpluses in trade of services are in financial sector, charges for the use of intellectual property, travel. The article highlights that US has recorded in the second decade a surplus on trade in services, making an overall trade deficit much less.

The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: Evidence from 25 developing countries

Developing countries play a dominant role in global carbon emissions. This study, for the first time, uses a panel of 25 major developing countries during the years 1996–2012 to explore the role of renewable energy consumption and commercial services trade in generating carbon emissions. The share and size of renewables consumption are both analysed for comparison purpose. Granger causality tests show that long-run bidirectional Granger causalities exist between economic growth, renewable energy consumption, international commercial services trade, and carbon emissions. Panel co-integration tests identify that long-run equilibrium exist between analysis variables. We also apply fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) for panel estimates. The Empirical results indicate that economic growth has significant effects on carbon emissions; the Environmental Kuznets Curve hypothesis is verified; increasing the share of renewable energy consumption contributes to carbon reduction; increasing the size of renewable energy consumption contrarily raised emissions; expanding commercial services trade could reduce carbon emissions. Our findings suggest that developing countries should promote commercial services trade and the share of renewable energy consumption for low-carbon economic growth.

Does bridging the Internet Access Divide contribute to enhancing countries' integration into the global trade in services markets?

This paper examines the impact of countries' distance between their Internet usage and the world' average of the Internet usage intensity on their integration into the world market of trade in commercial services. Using an unbalanced panel dataset of 175 countries over the annual period 2000–2013, the empirical analysis indicates that the narrowing of the Internet-related distance would improve countries' integration into the world trade in commercial services market. Furthermore, it helps those countries that are geographically far from the world market to compensate for the adverse effect of this geographical distance on their integration into the world market of trade in commercial services.

Regulatory Heterogeneity As Non-Tariff Barrier in Services Trade

International trade in services is hampered by non-tariff barriers that originate from national regulations. Not only the level of regulation in home or export country matters, but also the inter-country differences in regulation for service markets. Regulatory measures tend to affect fixed costs rather than variable costs. The fact that regulations often differ by market, means that the fixed costs of complying with regulations in an export market are in fact sunk market-entry costs. Our theoretical model demonstrates that policy heterogeneity between countries has a negative impact on bilateral service trade. We quantify bilateral policy variety through a new indicator that is applied in a gravity model for explaining service trade among EU countries. The empirical results support our theoretical prediction: the degree of regulatory heterogeneity is inversely related to the level of bilateral service trade. The results are applied to simulate the possible impacts of recent EU proposals for the services market. It shows that making more use of mutual recognition in regulation could increase bilateral trade in commercial services among EU countries by 30% to 60%.

Cross‐border and Foreign Affiliate Sales of Services: Evidence from German Microdata

AbstractWe merge German balance‐of‐payments and foreign‐affiliate‐trade statistics to obtain data about trade in commercial services at the firm level. We use these data to study export market participation and the choice of export mode: cross‐border versus foreign affiliate sales. We find that for firms in our sample productivity is both a statistically significant and economically important determinant of the export participation and export mode choice. We also identify the role of industry‐ and country‐specific determinants.

Cross Border and Foreign-Affiliate Sales of Services: Evidence from German Micro-Data

We merge German balance-of-payments and foreign-affiliate-trade statistics to obtain data about trade in commercial services at the firm level. We use these data to study export market participation and the choice of export mode: cross-border versus foreign-affiliate sales. We find that for firms in our sample productivity is both a statistically significant and economically important determinant of the export participation and export mode choice. We also identify the role of industry- and country-specific determinants.

Cross-Border and Foreign Affiliate Sales of Services: Evidence from German Micro-Data

We merge German balance-of-payments and foreign-affiliate-trade statistics to obtain data about trade in commercial services at the firm level. We use these data to study export market participation and the choice of export mode: cross-border versus foreign affiliate sales. We find that for firms in our sample productivity is both a statistically significant and economically important determinant of the export participation and export mode choice. We also identify the role of industry- and country-specific determinants.

Demand patterns and Canada’s trade in services

Canada’s trade in commercial services appears inconsistent with what manufacturing-oriented Heckscher-Ohlin theory predicts. Canada’s services trade is overwhelmingly intra-industry, involving countries whose factor proportions and demand patterns are similar—findings consistent with the ‘new’ trade theory, and the Linder hypothesis: that there is a uni-directional causal relationship flowing from the similarity (convergence) in demand patterns amongst trading partners, to Canada’s exports to those partners. Support for this conjecture is found for the US, the UK, and Japan. We infer that liberalization of trade in commercial services is likely welfare enhancing, with gains greater within trade arrangements and entities such as the NAFTA, the EU, and the OECD.

International trade in services: The role of international shipping

The General Agreement on Trade in Services (GATS) is one of the World Trade Organization's most important agreements. This accord is the first and only set of multilateral rules covering international trade in services. It is a framework for international trade in services and a legal basis for resolving conflicting national interests. For the past two decades, trade in services has grown faster than merchandise trade. Currently, they represent more than two thirds of the World Gross Domestic Product. As the term services covers a wide range of intangible and heterogeneous products and activities, there has been an increasing demand for detailed, relevant and internationally comparable statistical information on trade in services. In the last ten years, the share of transportation services in international trade in commercial services was steady and amounted to about one quarter.

Issues in the liberalization of trade in services

International trade in commercial services is large and is growing as fast as merchandise trade. The liberalization of service sector activity, often characterized hitherto by incumbent monopolies, can produce major welfare gains. Reaching multilateral agreement in liberalizing services runs into problems of definition and quantification. The General Agreement on Trade in Services, though complex and partial in its coverage, has highlighted the importance of multilateral commitment in the pursuit of domestic reform. The agreement on basic telecommunications in particular has had a catalytic effect on domestic policy. Copyright © 2000 John Wiley & Sons, Ltd.