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An empirical analysis of the causal nexus between service trade and income

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  • Samuel Admassu

    (Deakin University)

Abstract

Service trade has been growing at a higher rate than merchandise trade since the early 1980s. Using an instrument for service trade constructed from trading pair geographical information for 101 countries over the period from 2000 to 2010, this paper estimates the causal effect of service trade on income. The results reveal that a one percentage point increase in service trade increases per capita income by at least 0.1%.

Suggested Citation

  • Samuel Admassu, 2020. "An empirical analysis of the causal nexus between service trade and income," Empirical Economics, Springer, vol. 59(2), pages 799-816, August.
    • Handle: RePEc:spr:empeco:v:59:y:2020:i:2:d:10.1007_s00181-019-01680-x
    DOI: 10.1007/s00181-019-01680-x
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    More about this item

    Keywords

    Service trade; Income; Growth; Cross-country analysis; Gravity equation;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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