Advertisement

Review of World Economics

, Volume 142, Issue 2, pp 307–329 | Cite as

Does Gravity Matter in a Service Economy?

  • Janet Ceglowski
Article

Abstract

This paper estimates gravity equations for bilateral services trade in a sample of 28 countries. It finds that the standard gravity variables of economic size and geographic proximity are significant factors in services trade. It also reveals positive effects of linguistic ties on services trade. There is evidence of a positive link between regional trade arrangements and services trade. Much of that effect appears to reflect the impact of bilateral goods trade on services trade. This implies that efforts to enhance goods trade—bilateral or multilateral—should lead to more services trade as well.

Keywords

International trade services gravity model 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Adams, R., P. Dee, J. Gali, and G. McGuire (2003). The Trade and Investment Effects of Preferential Trading Arrangements—Old and New Evidence. Productivity Commission Staff Working Paper. May, Canberra.Google Scholar
  2. 2.
    Anderson, J., and D. Marcouiller (2002). Insecurity and the Pattern of Trade: An Empirical Investigation. Review of Economics and Statistics 84 (2): 342–352.Google Scholar
  3. 3.
    Baier, S., and J. Bergstrand (2001). International Trade in Services, Free Trade Agreements, and the WTO. In R. Stern (ed.), Services in the International Economy. Ann Arbor: University of Michigan Press.Google Scholar
  4. 4.
    Baier, S., and J. Bergstrand (2004). Economic Determinants of Free Trade Agreements. Journal of International Economics 64 (1): 29–63.Google Scholar
  5. 5.
    Fieleke, N. (1995). The Soaring Trade in “Nontradables.” New England Economic Review Nov/Dec: 25–36.Google Scholar
  6. 6.
    Francois, J. (1993). Explaining the Pattern of Trade in Producer Services. International Economic Journal 7 (3): 23–31.Google Scholar
  7. 7.
    Frankel, J. (1997). Regional Trading Blocs in the World Economic System. Washington: Institute for International Economics.Google Scholar
  8. 8.
    Gilbert, J., R. Scollay, and B. Bora (2001). Assessing Regional Trading Arrangements in the Asia-Pacific. UNCTAD Policy Issues in International Trade and Commodities Study Series No. 15. Geneva: United Nations Conference on Trade and Development.Google Scholar
  9. 9.
    Grünfeld, L., and A. Moxnes (2003). The Intangible Globalization: Explaining the Patterns of International Trade and FDI in Services. NUPI Working Paper 657. Norwegian Institute of International Affairs, Oslo.Google Scholar
  10. 10.
    Hoekman, B., and R. Stern (1991). Evolving Patterns of Trade and Investment in Services. In P. Hooper and J. D. Richardson (eds.), International Economic Transactions: Issues in Measurement and Empirical Research. Chicago: University of Chicago Press.Google Scholar
  11. 11.
    IMF (International Monetary Fund) (2002a). Balance of Payments Statistics Yearbook. Washington, D.C.: IMF.Google Scholar
  12. 12.
    IMF (International Monetary Fund) (2002b). Direction of Trade Statistics Yearbook. Washington, D.C.: IMF.Google Scholar
  13. 13.
    Langhammer, R. (1989). North-South Trade in Services: Some Empirical Evidence. In H. Giersch (ed.), Services in World Economic Growth. Tübingen: Mohr.Google Scholar
  14. 14.
    Mirza, D., and G. Nicoletti (2004). What Is So Special about Trade in Services? GEP Research Paper 2004/02. Leverhulme Center for Research on Globalization and Economic Policy, Nottingham.Google Scholar
  15. 15.
    New York Times Atlas of the World (1992). New York: Times Books.Google Scholar
  16. 16.
    OECD (Organization for Economic Cooperation and Development) (2000). Main Economic Indicators. Paris: OECD.Google Scholar
  17. 17.
    OECD (Organization for Economic Cooperation and Development) (2001a). Main Economic Indicators. Paris: OECD.Google Scholar
  18. 18.
    OECD (Organization for Economic Cooperation and Development) (2001b). OECD Economic Outlook 2001/1. No. 69. Paris: OECD.Google Scholar
  19. 19.
    OECD (Organization for Economic Cooperation and Development) (2003). Statistics on International Trade in Services, Partner Country Data and Summary Analysis 1999–2001. Accessed 2 December 2003 at www.oecd.orgGoogle Scholar
  20. 20.
    Sapir, A., and E. Lutz (1980). Trade in Non-Factor Services: Past Trends and Current Issues. World Bank Staff Working Paper 410. Washington, D.C.: World Bank.Google Scholar
  21. 21.
    Sapir, A., and E. Lutz (1981). Trade in Services: Economic Determinants and Development-Related Issues. World Bank Staff Working Paper 480. Washington, D.C.: World Bank.Google Scholar
  22. 22.
    Sapir, A., and C. Winter (1994). Services Trade. In D. Greenaway and L. A. Winters (eds.), Surveys in International Trade. Oxford: Blackwell.Google Scholar
  23. 23.
    World Bank (2001, 2002). World Development Indicators. Washington, D.C.Google Scholar
  24. 24.
    WTO (World Trade Organization) (2004). Notifications to the GATT/WTO. Accessed 10 February 2004 at www.wto.orgGoogle Scholar

Copyright information

© The Kiel Institute 2006

Authors and Affiliations

  1. 1.Economics DepartmentBryn Mawr CollegeBryn MawrUSA

Personalised recommendations