How Much do Agreements Matter for Services Trade?

32 Pages Posted: 11 Apr 2010 Last revised: 29 May 2012

See all articles by Anirudh Shingal

Anirudh Shingal

S.P. Jain Institute of Management & Research; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Bern - World Trade Institute

Date Written: October 1, 2010

Abstract

With an increasing number of Preferential Trade Agreements (PTAs) covering trade in services, we explore the impact of PTAs on services trade. To the best of our knowledge, this is the first paper in this literature that endogenizes the impact of services preferentialism in estimating the trade effect and also looks at its anticipation effects. We also add to this literature by distilling the trade effect of PTAs into that emanating from services and “goods only” agreements and further confirm complementarities between the two. Our results suggest a trade effect of 15% from having a services accord alone while the total incremental impact of a “goods only” agreement is found to be 7.6%. The services trade effect is accentuated to 59.7% once anticipation effects of services accords are included and such analysis also suggests that services agreements seem to have a significant “announcement effect.”

Keywords: Services trade, PTAs, gravity model, endogeneity, North-South

JEL Classification: F10, F13, F15

Suggested Citation

Shingal, Anirudh, How Much do Agreements Matter for Services Trade? (October 1, 2010). Available at SSRN: https://ssrn.com/abstract=1586839 or http://dx.doi.org/10.2139/ssrn.1586839

Anirudh Shingal (Contact Author)

S.P. Jain Institute of Management & Research ( email )

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Mumbai, Maharashtra 119579
India

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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Florence, Florence 50014
Italy

University of Bern - World Trade Institute ( email )

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Bern, 3012
Switzerland

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