Policy Barriers to International Trade in Services: Evidence from a New Database

By I. Borchert, Batshur Gootiiz, Aaditya Mattoo. 2012

271 citations recorded by the source corpus.

Surprisingly little is known about policies that affect international trade in services. Previous analyses have focused on policy commitments made by countries in international agreements but these commitments do not in many cases reflect actual policy. This paper describes a new initiative to collect comparable information on services trade policies for 103 countries, across a range of service sectors and the relevant modes of service delivery. The resultant database reveals interesting patterns in policy. Across regions, some of the fastest growing countries in Asia and the oil-rich Gulf states have the most restrictive policies in services, whereas some of the poorest countries are remarkably open. Across sectors, professional and transportation services are among the most protected in both industrial and developing countries, while retail, telecommunications and even finance tend to be more open. An illustrative set of results suggests that trade policies matter for investment flows and access to services. In particular, restrictions on foreign acquisitions, discrimination in licensing, restrictions on the repatriation of earnings and lack of legal recourse all have a significant and sizable negative effect, reducing the expected value of sectoral foreign investment by $2.2 billion over a 7-year period, compared with"open"policy regimes. In terms of access to services, credit as a share of gross domestic product is on average 3.3 percentage points lower in countries with major restrictions on the establishment of foreign banks as compared with those that only impose operational restrictions.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0a71bb4cf25374aba1e7e7313232d3c62032fb86

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Citations in the corpus

Services trade policy and manufacturing productivity: The role of institutions (2017, background): “The World Bank’s Services Trade Restrictiveness Database provides information for a broad set of countries (103 economies) on policies affecting services imports (Borchert et al., 2014).”
Services productivity, trade policy and manufacturing exports (2017, unknown): “The only one that requires elaboration is our measure of services trade restrictiveness: the World Bank’s Services Trade Restrictiveness Index (Borchert et al., 2012; and Borchert et al., 2014).”
The Hyperglobalization of Trade and Its Future (2013, background): “According to Borchert et al. (2012), China’s services sector policies are about three times as restrictive as those of the United States.”