Trade in Services: IT and Task Content

National Bank of Belgium Working Paper No. 200

56 Pages Posted: 17 Oct 2010

See all articles by Andrea Ariu

Andrea Ariu

Catholic University of Louvain (UCL)

Giordano Mion

University of Sussex - Department of Economics; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 1, 2010

Abstract

In this paper we investigate the determinants of the dramatic increase in services tradability focusing on the extensive margin of the phenomenon. We use balance sheet and firm-level service trade information over the period 1995-2005 provided by the National Bank of Belgium and we merge it with information on the evolution of information technology use and tasks performed by workers from the qualification and career survey provided by the BIBB-IAB. We show that technological change, measured either by the more intensive use of information technologies or by changes in the task content of jobs, has substantially contributed to the increase in the number of service-trading firms. Interestingly, we find evidence of a churning effect. While technological change has induced net entry into service trading, it has also increased the likelihood of both gross entry and exit of firms. Furthermore, our evidence suggests that due to the peculiar nature of services provision, the change in the tasks content of jobs is a better measure of technological change than the use of information technologies. Our results are robust to controlling for service trade liberalization and offshoring.

Keywords: Trade In Services, Extensive Margin, Technological Change, Task Content

JEL Classification: F14, F16, O33, L80

Suggested Citation

Ariu, Andrea and Mion, Giordano, Trade in Services: IT and Task Content (October 1, 2010). National Bank of Belgium Working Paper No. 200, Available at SSRN: https://ssrn.com/abstract=1692589 or http://dx.doi.org/10.2139/ssrn.1692589

Andrea Ariu (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Giordano Mion

University of Sussex - Department of Economics ( email )

Falmer, Brighton BN1 9SL
United Kingdom

HOME PAGE: http://sites.google.com/site/giordanomionhp/

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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