Trade and Direct Investment in Producer Services and the Domestic Market for Expertise

By James R. Markusen, Thomas F. Rutherford, D. Tarr. 2005

173 citations recorded by the source corpus.

Foreign producer services can provide substantial benefits for domestic firms. We build on earlier monopolistic-competition models of intermediate producer services in this paper. Results show that: (1) while foreign services are partial-equilibrium substitutes for domestic skilled labour, they may be general-equilibrium complements, (2) service trade can provide crucial missing inputs that reverse comparative advantage in final goods, (3) the `optimal' tax on imported services may be a subsidy, and (4) in our dynamic formulation, there may be earnings losses for immobile workers along a transition path that suggest potentially important equity consequences of reform.

View Paper: https://www.semanticscholar.org/paper/dff82c0834cfb4c9f70066955381c27623fd0ad5

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

1. Joseph Francois
2. J. Woerz
3. Bernard M. Hoekman
4. Thomas W. Hertel
5. Ben Shepherd
6. Alberto Portugal-Perez

Citations in the corpus

• Producer Services, Manufacturing Linkages, and Trade (2008, background): “(Markusen 1989; Francois 1990b; van Marrewijk et al. 1997; Markusen et al. 2005).”
• Services Policy Reform and Economic Growth in Transition Economies, 1990-2004 (2005, unknown): “The associated cost reductions can have the effect of upgrading overall productivity, and are likely to be enhanced by, if not conditional on, increased FDI in services (Konan and Maskus, 2004; Markusen et al., 2005).”