Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201677
Authors: 
Kern, Milena
Paetzold, Jörg
Winner, Hannes
Year of Publication: 
2018
Series/Report no.: 
Working Papers in Economics 2018-09
Abstract: 
Trade in services is often hampered by domestic administrative barriers, even when countries are members of the same regional trade agreement. We exploit a large reform in the European Union (the EU Service Directive) targeted to reduce such administrative hurdles in cross-border service provision to estimate its effects on service trade. We employ a difference-in-difference strategy and a Pseudo Poisson Maximum Likelihood (PPML) panel approach to estimate gravity equations with multiple high-dimensional fixed effects. On average, the reform increased intra-EU trade in targeted services by about 40%. This effect of the reform on trade volume is corroborated by several robustness and placebo checks. Finally, a disaggregated analysis reveals significant differences between countries and service sectors.
Subjects: 
Service trade
trade liberalisation
gravity equation
JEL: 
F13
F14
F15
Document Type: 
Working Paper
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