The Role of Goods‐Trade Networks for Services‐Trade Volume

12 Pages Posted: 22 Mar 2017

See all articles by Peter H. Egger

Peter H. Egger

Ifo Institute for Economic Research - International Trade and Foreign Direct Investment; Ludwig-Maximilians University of Munich; CESifo (Center for Economic Studies and Ifo Institute for Economic Research

Joseph F. Francois

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR); Vienna Institute of International Economic Studies (WIIW); University of Adelaide - School of Economics

Douglas Nelson

Tulane University - Department of Economics

Date Written: March 2017

Abstract

In this paper, we address the role of countries’ goods‐trade networks for their services‐trade volume. The paper employs a large cross section of bilateral trade data on aggregate cross‐border goods and services sales and illustrates that the depth and overlap of two countries’ services networks induce a positive direct impact on their services‐trade volume. The evidence takes into account that goods trade flows and networks are potentially endogenous so that the estimated direct effects support a causal interpretation. We find that the magnitude of the multilateral goods‐trade network effect on the bilateral services‐trade volume is much larger than that of bilateral goods‐trade volume.

Suggested Citation

Egger, Peter H. and Francois, Joseph F and Nelson, Douglas R., The Role of Goods‐Trade Networks for Services‐Trade Volume (March 2017). The World Economy, Vol. 40, Issue 3, pp. 532-543, 2017. Available at SSRN: https://ssrn.com/abstract=2938142 or http://dx.doi.org/10.1111/twec.12331

Peter H. Egger (Contact Author)

Ifo Institute for Economic Research - International Trade and Foreign Direct Investment ( email )

Poschingerstr. 5
Munich, DE-81679
Germany
+49 0 89 9224 1238 (Phone)
+49 0 89 985369 (Fax)

HOME PAGE: http://www.cesifo-group.de/portal/page?_pageid=36,425628&_dad=portal&_schema=PORTAL

Ludwig-Maximilians University of Munich

Schackstr. 4
Munich, 80539
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research

Poschinger Str. 5
Munich, DE-81679
Germany

Joseph F Francois

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Vienna Institute of International Economic Studies (WIIW) ( email )

Oppolzergasse 6
A-1010 Vienna
Austria

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 5540 (Phone)
+61 8 8223 1460 (Fax)

Douglas R. Nelson

Tulane University - Department of Economics ( email )

New Orleans, LA 70118
United States

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