Going Beyond the 0/1 Dummy: Estimating the Effect of Heterogeneous Provisions in Services Accords on Services Trade

15 Pages Posted: 22 Nov 2014 Last revised: 5 Jun 2015

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, 2014

Abstract

The proliferation of preferential trade agreements in services (STAs) and improved availability of data on bilateral services trade flows has resulted in a growing literature on the theoretical and empirical assessment of services trade effects. However, this literature has not considered the different types of provisions found in STAs while estimating the trade effects. We address this issue taking into account the heterogeneity of provisions found in STAs using the Design of Trade Agreements (DESTA) database (Dür et.al, 2014). Our results suggest that not accounting for this heterogeneity lends an upward bias to the magnitudes of the estimated trade effects. This finding is robust to estimations involving only positive and those incorporating zero trade flows as well as to sample coverage (all, EU, non-EU, North-North, North-South).

Keywords: Services trade, PTAs, heterogeneous commitments, trade effects, endogeneity

JEL Classification: F10, F13, F15

Suggested Citation

Shingal, Anirudh, Going Beyond the 0/1 Dummy: Estimating the Effect of Heterogeneous Provisions in Services Accords on Services Trade (October 1, 2014). Available at SSRN: https://ssrn.com/abstract=2528699 or http://dx.doi.org/10.2139/ssrn.2528699

Anirudh Shingal (Contact Author)

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

Munshi Nagar, Dadabhai Road
Andheri West
Mumbai, Maharashtra 119579
India

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

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50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

University of Bern - World Trade Institute ( email )

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Bern, 3012
Switzerland

HOME PAGE: http://www.nccr-trade.org

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