Services Trade and Global Value Chains

32 Pages Posted: 24 Jul 2017 Last revised: 28 Aug 2018

See all articles by Cecilia Heuser

Cecilia Heuser

World Bank

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Date Written: June 27, 2017


Services play a role in global value chains in many ways, similar to goods. But services deserve special attention because of how they are transacted, how they affect downstream sectors, how they are regulated, and how international cooperation can contribute to integrating national markets. Databases on trade in value added, which cover only cross-border transactions in services, reveal a high and growing share of services in trade in value added across countries and industries. Although international transactions in services that take place through foreign investment are difficult to measure, their economic impact can be estimated. The resulting improved access to financial, communications, and transport services facilitates the emergence of global value chains, enhances downstream manufacturing firms? productivity, and shifts the pattern of comparative advantage toward sectors intensive in these services. Despite significant unilateral liberalization, service markets in many countries remain protected by restrictions on the entry of foreign services and service providers, as well as discretionary and discriminatory regulatory requirements. International cooperation in services has attempted to follow the example of reciprocal market opening for goods, but this approach has delivered little incremental liberalization. More could be achieved through greater emphasis on international regulatory cooperation.

Keywords: Common Carriers Industry, Food & Beverage Industry, Business Cycles and Stabilization Policies, Pulp & Paper Industry, Plastics & Rubber Industry, Construction Industry, General Manufacturing, Textiles, Apparel & Leather Industry, International Trade and Trade Rules, Transport and Trade Logistics, Industrial and Consumer Services and Products, Transport Services

Suggested Citation

Heuser, Cecilia and Mattoo, Aaditya, Services Trade and Global Value Chains (June 27, 2017). World Bank Policy Research Working Paper No. 8126, Available at SSRN:

Cecilia Heuser (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
Room MC 3-327
Washington, DC 20433
United States
202-458-8047 (Phone)
202-676-9810 (Fax)


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