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1. What Mode of Supply Will Matter the Most for the Future of Services Trade?

Author:
Lucian Cernat
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief looks at the latest trends in services trade and tries to show their importance, in its various manifestations, for virtually all countries in the world. The paper starts with a short history of trade in services across centuries. Fast forward to today’s realities, the paper uses the most comprehensive datasets documenting the latest trends in global trade in services by modes of supply, trying to fill a gap in trade policy analysis and providing new insights on the importance of different modes of supply for various countries. The paper concludes with some recommendations aimed at creating a bridge between the various policy priorities shaping the future of globalisation in coming years.
Topic:
Globalization, Services, Trade, and Supply
Political Geography:
Global Focus

2. Does Gravity Matter for Trade in Intermediate Services?

Author:
Anmol Kaur Grewal
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This paper makes a twofold contribution to the literature on trade in services. First, I construct a novel bilateral dataset of trade in services differentiating between final consumption and intermediate consumption following the most recent classification of UN’s Broad Economic Categories (BEC Rev. 5). Second, I use this dataset to estimate a gravity model of trade in intermediate and final services for a sample of 48 economies for the time period 2010-2019. Using a robust model specification consistent with the recent advancements in the gravity literature, I find that trade in services exhibits a sensitivity to bilateral distance between trading partners, similar to trade in goods. Intermediate services tend to be more sensitive to distance relative to final services due to the distinct nature of these services (B2B versus B2C). Common language and common borders are important determinants of both trade in intermediate and final services. I also find evidence of non-linear effects of time zone differences on trade in services.
Topic:
Economics, Services, Trade, and Consumption
Political Geography:
Global Focus

3. Does Gravity Matter for Trade in Intermediate Services?

Author:
Anmol Kaur Grewal
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This paper makes a twofold contribution to the literature on trade in services. First, I construct a novel bilateral dataset of trade in services differentiating between final consumption and intermediate consumption following the most recent classification of UN’s Broad Economic Categories (BEC Rev. 5). Second, I use this dataset to estimate a gravity model of trade in intermediate and final services for a sample of 48 economies for the time period 2010-2019. Using a robust model specification consistent with the recent advancements in the gravity literature, I find that trade in services exhibits a sensitivity to bilateral distance between trading partners, similar to trade in goods. Intermediate services tend to be more sensitive to distance relative to final services due to the distinct nature of these services (B2B versus B2C). Common language and common borders are important determinants of both trade in intermediate and final services. I also find evidence of non-linear effects of time zone differences on trade in services.
Topic:
Economics, Services, Trade, Consumption, and Intermediate Services
Political Geography:
Global Focus

4. Prosperity and Resilience: Diverse Production and Comparative Advantage in Modern Economies

Author:
David Henig and Anna Guildea
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
A common version of trade theory suggests that countries will specialise in a limited number of products. Using the example of David Ricardo from 1817, England specialises in cloth and Portugal in producing wine – and then they trade with each other to mutual benefit. However, this is a crude version of comparative advantage that routinely leads to political concerns about trade. Today the prime concern is that Europe and other developed countries have become too dependent on China by allowing the logic of comparative advantage to work. In short, trade has made us vulnerable. The observed reality is different. Most advanced economies produce and export a broad range of goods and services. Their governments have similar aspirations to develop and support diverse manufacturing and services, including in the most traded global sectors such as pharmaceuticals, automotive, business services, and food and drink. Modern specialisation comes in countries producing various, but not all, products within global supply chains. Patterns of trade suggest such specialisation has allowed countries to both grow and become resilient to individual shocks. Knowledge and ownership of the whole supply chain is more important than producing everything.
Topic:
Globalization, Economy, Services, Resilience, WTO, and Production
Political Geography:
Europe and Global Focus

5. Services Trade Needs to be Taken as Seriously as Goods Trade

Author:
Anna Guildea and David Henig
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Services constitute at least a quarter of total trade. Between 2009 and 2019 global services trade increased by nearly 50%, compared to 18% for goods trade. Yet it is rarely taken as seriously as goods in global trade policy discourse. This is a problem when making the case for trade.
Topic:
Globalization, Services, Trade, and WTO
Political Geography:
Global Focus

6. The evolving gender gap in labor force participation during COVID-19

Author:
Simeon Djankov, Pinelopi Koujianou Goldberg, Lisa Hyland, and Eva (Yiwen) Zhang
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Despite many significant gains by women in the paid workforce in recent decades, the percentage of women participating in the labor force has remained lower than the percentage of male participants. Now, in response to the COVID-19 pandemic and the global economic downturn it precipitated, the gap in labor force participation between men and women in some economies has actually widened, with potentially damaging repercussions for women’s career prospects and pay. The pandemic has disproportionately affected sectors employing more women, such as retail stores, restaurants, and the hotel and hospitality business. An increase in family caregiving responsibilities because of school and childcare closures has also fallen on working mothers' shoulders. Both factors have pulled women out of the labor force. The authors track trends in male and female labor force participation in 43 countries and find substantial differences across countries in the way women’s participation has been affected relative to that of men. In some countries, such as Colombia, Chile, and Cyprus, the gender gap in labor force participation widened the most during the pandemic. The gender gap also widened in the United States, driving 2.5 million women from their jobs in what Vice President Kamala Harris called a “national emergency” for women. In other economies, such as Luxembourg and Lithuania, the gender gap in labor force participation, unexpectedly, shrank during the early period of the pandemic. On average, female employees have fared better in countries where women are less concentrated in the services sector, less likely to be employed as temporary workers, and where laws supported greater equality at the onset of the crisis. Greater government expenditure on childcare in the pre-COVID-19 era, however, does not appear to have insulated female workers from the damaging repercussions of the pandemic.
Topic:
Economics, Gender Issues, Labor Issues, Women, Services, COVID-19, and Empowerment
Political Geography:
Colombia, Chile, Cyprus, Global Focus, and United States of America

7. Robots and Labor in the Service Sector: Evidence from Nursing Homes

Author:
Karen Eggleston, Yong Suk Lee, and Toshiaki Lizuka
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
In one of the first studies of service sector robotics using establishment-level data, we study the relationship between robots and staffing in Japanese nursing homes. We utilize variation in robot subsidies across prefectures as an instrumental variable to explore the impact of robot adoption on nursing homes’ staffing decisions. We find that robot adoption appears to decrease difficulty in staff retention and to increase employment by augmenting the number of care workers and nurses on flexible employment contracts. Robot adoption is negatively correlated with the monthly wages of regular nurses, consistent with reduced burden of care such as fewer night shifts. Our findings suggest that robots may not be detrimental to labor and may help to remedy challenges posed by rapidly aging populations.
Topic:
Science and Technology, Labor Issues, Services, Innovation, Artificial Intelligence, Robotics, Emerging Technology, and Labor Cost
Political Geography:
Global Focus

8. Sources of Comparative Advantage in Services: Institution vs. Social Capital

Author:
Nakgyoon Choi and Soonchan Park
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Previous studies that have identified the impacts of institutions or cultural traits on comparative advantage focused on goods trade, but not services trade. In contrast to the rapid increase in trade in services, empirical examina-tion on sources of comparative advantage in services trade remains limited. This paper attempts to fill this gap by investigating empirically the impacts of institution as well as social capital on comparative advantage in services trade. Services are exposed to relatively more pre-choice risks than goods, because it is difficult to obtain information on the quality of services before the con-sumer decides to purchase. In addition, trade in services involved in global value chains possibly takes on the risks of contract breach by other firms along the same value chains. As a result, the transaction risks for trade in ser-vices are higher than for trade in goods. Using the World Input Output Da-tabase, we estimate the importance of social capital for comparative ad-vantage in services. We find that countries with more social capital tend to specialize in the production of contract-intensive services. We also find that social capital rather than institution matters for comparative advantage in ser-vices.
Topic:
Economic Policy, Institutions, Services, Trade, and Social Capital
Political Geography:
Global Focus

9. Dynamic Cities? The Role of Urban Local Governments in Improving Urban Service Delivery Performance in Africa and Asia

Author:
Jamie Boex, Ammar A. Malik, Devanne Brookins, and Ben Edwards
Publication Date:
07-2016
Content Type:
Research Paper
Institution:
Urban Institute
Abstract:
Cities are engines of economic growth that provide spaces for social transformation and political inclusion. Their ability to deliver widely accessible and efficiently functioning public services drives productivity and sustains development. We design and apply an assessment framework to 42 cities in 14 African and Asian countries to better understand the functional, administrative, and political dimensions determining the quality and coverage of water, sanitation, and solid waste collection services. We find that urban local governments are constrained in their authority and discretion to deliver basic public services. Reforming intergovernmental institutional structures to better match responsibilities is essential for realizing cities’ full economic potential.
Topic:
Government, Water, Governance, International Development, Economic Growth, Urban, Sanitation, Services, and Cities
Political Geography:
Africa, Asia, and Global Focus

10. Triggering Increased City-Level Public Finance for Pro-Poor Sanitation Improvements

Author:
Jameson Boex and Benjamin Edwards
Publication Date:
01-2015
Content Type:
Research Paper
Institution:
Urban Institute
Abstract:
This paper provides a general framework for understanding the political economy and fiscal determinants of sanitation service provision by urban local governments. The paper will address several questions: what do we expect to influence spending on local sanitation? Do different fiscal instruments have an impact on expenditure levels? Do increased local revenues lead to increased expenditures over the long term? What role do different stakeholders play in determining expenditure levels? The paper first looks at the role of political factors in constraining local expenditure decisions, then turns to a review of the fiscal determinants of service delivery expenditures.
Topic:
Political Economy, Governance, Urban, Sanitation, Services, and Cities
Political Geography:
Global Focus