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The interconnections between services and goods trade at the firm-level
journal contribution
posted on 2023-06-09, 15:41 authored by Andrea Ariu, Holger Breinlich, Gregory Corcos, Giordano MionIn this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms for the period 1995–2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) joint imports are associated with higher firm productivity; iii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to guide our econometric strategy. We use our results to quantify the impact of reductions in goods and services barriers between the US and the EU. Our findings have important implications for the design of trade policy. They suggest that a liberalization of services trade can have direct and sizable effects on goods trade, and vice versa. Moreover, liberalizing goods and services trade jointly brings substantial complementarities.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of International EconomicsISSN
0022-1996Publisher
ElsevierExternal DOI
Volume
116Page range
173-188Department affiliated with
- Economics Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2018-11-01First Open Access (FOA) Date
2020-06-03First Compliant Deposit (FCD) Date
2018-10-31Usage metrics
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