The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data

36 Pages Posted: 9 Oct 2013

See all articles by Matthieu Crozet

Matthieu Crozet

Université Paris I Panthéon-Sorbonne - TEAM

Emmanuel Milet

Paris School of Economics (PSE)(Paris1)

Daniel Mirza

Banque de France

Date Written: October 1, 2013

Abstract

In order to promote international trade in services, the WTO-GATS aims at progressively eliminating discriminatory regulations, which apply to foreign suppliers, by guaranteeing equal national treatment. This paper looks instead at the trade effect of domestic regulations, which apply to all firms indifferently and do not intend to exclude foreign suppliers. We propose a theory-based empirical test to determine whether or not these domestic regulations affect foreign suppliers more than local ones. We take this test to the data by using French firm-level exports of professional services to OECD countries. Our econometric results show that domestic regulations in the importing markets matter significantly for trade in services. They reduce both the decision to export and the individual exports. These results tend to prove that domestic regulations are de facto discriminatory even if they are not de jure.

Keywords: Trade in services, Domestic Regulations, Firm Heterogeneity

JEL Classification: F1, L8

Suggested Citation

Crozet, Matthieu and Milet, Emmanuel and Mirza, Daniel, The Discriminatory Effect of Domestic Regulations on International Trade in Services: Evidence from Firm-Level Data (October 1, 2013). Available at SSRN: https://ssrn.com/abstract=2337410 or http://dx.doi.org/10.2139/ssrn.2337410

Matthieu Crozet (Contact Author)

Université Paris I Panthéon-Sorbonne - TEAM ( email )

106-112 boulevard de l'hôpital
Cedex 13 Paris, P75647
France
+33 1 4407 8267 (Phone)
+33 1 4407 8267 (Fax)

Emmanuel Milet

Paris School of Economics (PSE)(Paris1) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Daniel Mirza

Banque de France ( email )

Paris
France

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