Abstract
We develop a new analytical framework for both cross-border services
trade and services trade through foreign affiliates, based on heterogeneous
firms operating under oligopoly. This leads to direct predictions
about choice of services delivery (mode of delivery) at the firm level, and
about the pattern of bilateral trade at the industry level. We examine
the industry-level predictions, working with a panel of U.S. data. Unlike
the recent literature that works with FDI as a proxy for affiliate services
sales, we work directly with data on bilateral U.S. trade through affiliates.
These data feature more sector detail than in the recent literature. We
also directly compare observed patterns of services trade and affiliate sales
with the corresponding indicators of patterns of cross-border and affliate
sales for manufacturing sectors. In contrast to mixed results in manufacturing,
in services overseas multinational activities consistently increase
relative to direct exports the further away are host countries. Language
and the presence of manufacturing FDI are also important. The impact
of factors like corporate tax rates and relative stocks of human capital on
modes of service delivery varies across sectors. The evidence on interdependence
across modes and the importance of local affiliates implies that
the impact of policy in any one mode is likely to depend on the mix of
domestic regulation and policy across all modes of supply.
Keywords: International Trade in Services, Modes of Supply, FDI, Foreign
Affliates Trade, GATS
JEL codes: F10, F14, F23, L80
Sprache der Kurzfassung:
Englisch
Erscheinungsmonat:
6
Erscheinungsjahr:
2010
Notiz zur Publikation:
Working Paper 1008, Department of Economics, University of Linz, Austria
Forschungs-