Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330286 
Year of Publication: 
2025
Series/Report no.: 
CITP Working Paper No. 017
Publisher: 
Centre for Inclusive Trade Policy (CITP), University of Sussex Business School, Brighton
Abstract: 
We investigate the relationship between manufacturing sector productivity and two new measures proxying for barriers to trade in services – restrictions affecting payment for cross-border imports of services and receipts for inward investment. Our services trade policy proxies span the 1965-2018 period, a much longer time span than extant services trade restrictiveness indicators, allowing analysis of the pre-hyper globalization period as well as the post-global financial crisis years that has been the focus of the services trade literature. We find that (i) lower restrictions on services trade and cross-border investment are associated with higher productivity in manufacturing industries that rely more intensely on service inputs; and (ii) that international services payment restrictions and inward investment restrictions are complements: manufacturing productivity is higher when both are simultaneously liberalized. The relationship between international payment restrictions and manufacturing sector performance is heterogeneous, varying across time and countries with differing per capita incomes and governance quality.
Subjects: 
financial openness
liberalization
services input intensity
services trade policy
manufacturing productivity
JEL: 
F13
F15
F21
F23
L60
L80
Document Type: 
Working Paper

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