Trade In Intermediate Services Research Articles

Deconstructing Deglobalization: The Future of Trade is in Intermediate Services

AbstractThis article contests the idea that the world has entered a post‐globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade‐to‐GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one‐fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services.

Intangibles Trade and MNEs: Supply-Chain Trade in R&D Services and Innovative Subsidiaries

This paper contributes to the literature on vertical specialization in R&D (or ‘R&D fragmentation’) and trade in intermediate services by examining the role of multinational enterprises (MNE) activities associated with bilateral foreign direct investment (FDI). Prior work in production networks (or global value chains [GVCs]) and R&D fragmentation suggests a complementarity relationship between FDI in R&D and technological knowledge flows. The paper examines this proposition empirically for R&D services trade by extending the gravity framework of supply-chain trade for intermediate services with bilateral MNE operations as economic mass variables. The results are partially consistent with the hypothesized complementarity. The econometric strategy accounts for zero trade observations. The latter addresses possible selection and consistency issues of traditional gravity trade specifications, and allows exploring extensive vs. intensive margin of trade. Understanding the role of MNEs in these transactions may be useful for policies aimed at increasing participation and upgrading in MNE-driven GVCs.

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

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.

ICT, Access to Services and Wage Inequality

This paper discusses how information and communication technology (ICT) affects the quality and reach of consumer services. These services need to be provided locally, but consist of several components, some of which can be digitised and transmitted over long distances. A general equilibrium model is developed and numerical simulations in a stylised two-factor, two-region, centre-periphery setting are presented. Trade in intermediate services improves the quality of consumer services enormously in the periphery, but may reduce the quality at the centre. Trade in intermediate services also has a dramatic impact on skilled workers' wages in the periphery, both relative to unskilled workers in their own region and relative to skilled workers at the centre and leads to a more equal distribution of income both between the centre and the periphery and within the periphery.