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Review of World Economics

, Volume 152, Issue 1, pp 19–41 | Cite as

Services versus goods trade: a firm-level comparison

  • Andrea Ariu
Original Paper

Abstract

Using transaction data from Belgium, we provide a descriptive comparison of trade in goods and trade in services at the firm level. From a static perspective, we find that firms trading services are fewer and export and import smaller values than those trading goods. This is because they trade fewer products, with less countries, making fewer transactions and these gaps are only partially counterbalanced by larger transaction values. Instead, firms trading both services and goods are even rarer, but they account for a substantial share of total trade. In the time dimension, services traders experience higher entry and exit rates and a lower survival probability. However, the surviving firms grow more rapidly than those trading goods thanks to an increase in the number of transactions per product-market. Finally, we observe that firms that trade only services add also goods in their export and import basket and vice versa. This is a further important growth channel for firms in international markets.

Keywords

Trade in services Trade in goods Dynamics 

JEL Classification

F10 F14 L80 

Notes

Acknowledgments

This work was carried out while I was a Ph.D. at IRES, Univeristé catholique de Louvain and an intern at the National Bank of Belgium, I thank for the hospitality and the support provided. All views expressed in this paper, as well as the errors, are my own solely and do not necessarily reflect the views of the National Bank of Belgium. I thank Chiara Farronato, Kalina Manova, Giordano Mion and Florian Mayneris for their helpful comments, as well as the editor, Harmen Lehment and two anonymous referees.

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Copyright information

© Kiel Institute 2015

Authors and Affiliations

  1. 1.University of GenevaGenevaSwitzerland
  2. 2.McDonough Business SchoolGeorgetown UniversityWashingtonUSA
  3. 3.CRENOSCagliariItaly

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