Quantifying Barriers to Movement of Service Suppliers and Examining Their Effects

37 Pages Posted: 16 Oct 2020

See all articles by Anirudh Shingal

Anirudh Shingal

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

Date Written: October 2020

Abstract

The importance of services trade and “servicification” of economic activity has grown in countries overtime. However, regulatory and administrative barriers to the movement of service suppliers have meant that “Mode 4” accounted for only 2.1% of total services trade in 2005 and 2.9% in 2017. While trade costs for services have been computed in the literature, barriers specific to Mode 4 services trade have not yet been quantified. We contribute by constructing an index to quantify regulatory barriers to the movement of service suppliers, using qualitative information embedded in OECD data on services trade restrictions, and estimate its effects on the four “modes” of services supply. Results show that the Mode 4 restrictiveness index is negatively correlated with services imports in three of the four modes of services delivery that require proximity between buyers and sellers. These findings underline the need for countries to refrain from imposing prohibitive restrictions on service suppliers in the wake of Covid-19.

Keywords: Services trade, Mode 4, services suppliers, STRI, Covid-19.

JEL Classification: F1, F10, F13

Suggested Citation

Shingal, Anirudh, Quantifying Barriers to Movement of Service Suppliers and Examining Their Effects (October 2020). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2020/64, Available at SSRN: https://ssrn.com/abstract=3712432 or http://dx.doi.org/10.2139/ssrn.3712432

Anirudh Shingal (Contact Author)

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

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Florence, Florence 50014
Italy

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