Services Policy Reform and Manufacturing Employment: Evidence from Transition Economies

37 Pages Posted: 2 Dec 2016

See all articles by Matteo Fiorini

Matteo Fiorini

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

Bernard Hoekman

Robert Schuman Centre for Advanced Studies; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR)

Clément Malgouyres

Paris School of Economics (PSE); Institut des politiques publiques (PSE)

Multiple version iconThere are 3 versions of this paper

Date Written: September 2016

Abstract

The performance of services sectors can have significant impacts on industries that use services as intermediate inputs. In this paper we complement the literature analyzing the productivity effects of services trade policies by investigating the relationship between services policy reforms and employment in manufacturing industries. Using a panel of sector-level data for 24 transition economies for the 1990-2012 period, we find find that moving towards best practice services policies is associated with an economically significant reduction of manufacturing employment. This negative effect is mitigated or disappears for countries with high levels of economic governance and human capital. The decline in manufacturing employment is observed only in the first decade of transition, with the major driver being reforms in the utilities sector. The estimated negative effect of policy reforms is of a contemporaneous nature; it does not persist along the lag structure.

Keywords: services policy; employment; transition economies

JEL Classification: F16; F66; J23; P21

Suggested Citation

Fiorini, Matteo and Hoekman, Bernard and Malgouyres, Clément, Services Policy Reform and Manufacturing Employment: Evidence from Transition Economies (September 2016). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2016/46. Available at SSRN: https://ssrn.com/abstract=2879325 or http://dx.doi.org/10.2139/ssrn.2879325

Matteo Fiorini (Contact Author)

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

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Bernard Hoekman

Robert Schuman Centre for Advanced Studies ( email )

Fiesole, Tuscany
Italy

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

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Clément Malgouyres

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Institut des politiques publiques (PSE) ( email )

48 boulevard Jourdan
Paris, 75014
France

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