Working Paper: NBER ID: w21546
Authors: James E. Anderson; Ingo Borchert; Aaditya Mattoo; Yoto V. Yotov
Abstract: A structural gravity model is used to estimate barriers to services trade across many sectors, countries and time. Since the disaggregated output data needed to flexibly infer border barriers are often missing for services, we derive a novel methodology for projecting output data. The empirical implementation sheds light on the role of institutions, geography, size and digital infrastructure as determinants of border barriers. We find that border barriers have generally fallen over time but there are differences across sectors and countries. Notably, border effects for the smallest economies have remained stable, giving rise to a divergent pattern across countries.
Keywords: services trade; structural gravity model; border barriers; trade costs
JEL Codes: F10; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| institutions (D02) | border barriers (F55) |
| geography (R12) | border barriers (F55) |
| size (L25) | border barriers (F55) |
| digital infrastructure (L86) | border barriers (F55) |
| border barriers (F55) | services trade costs (F19) |
| size (L25) | services trade costs (F19) |
| digital infrastructure (L86) | border-crossing costs (F55) |
| time (C41) | border barriers (F55) |