Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207157 
Year of Publication: 
2019
Series/Report no.: 
WIFO Working Papers No. 584
Publisher: 
Austrian Institute of Economic Research (WIFO), Vienna
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) aimed at reducing 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 fixed effects. On average, the reform increased intra-EU trade in targeted services between a lower bound of 27 percent and an upper bound of 55 percent, translating into an overall welfare increase between 0.35 and 1.04 percent. This effect of the reform on service trade 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
European integration
JEL: 
F13
F14
F15
Document Type: 
Working Paper

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