Working Paper: CEPR ID: DP9036
Authors: Andrea Ariu
Abstract: In this paper, we present for the first time a qualitative and quantitative comparison between trade in services and trade in goods at firm level for the same country. We focus first on static features of trade such as participation rates,, firms' characteristics, heterogeneity, concentration and trade variation. Secondly, we explore dynamic aspects focusing on entry, exit, survival and growth strategy in foreign markets. On the one hand, our results reveal qualitative similarities between services and goods trade at firm level, suggesting that heterogeneous models of trade can be a good starting point for the analysis of trade in services. On the other hand, we highlight dramatic di erences in quantitative terms and in some key characteristics that pose new challenges to current trade models.
Keywords: trade dynamics; trade in goods; trade in services
JEL Codes: F10; F14; L80
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher fixed costs for services (L84) | reduced firm participation in international markets (F23) |
| nature of services (L84) | likelihood of firm participation (D22) |
| type of trade (F19) | growth trajectories (O41) |
| higher transaction frequency for services (L81) | growth of services (L84) |
| higher fixed costs (L11) | fewer firms entering the market (L19) |