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International trade in financial services

Author

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  • Allan Webster
  • Philip Hardwick

Abstract

International trade in financial services is a topic of some importance both to the financial services sector itself and in international trade negotiations. Unfortunately, intrinsic problems in defining and measuring trade in services, combined with a lack of data in many countries, have made empirical analysis of trade in financial services difficult. Recent improvements in data, although still providing only a limited coverage, do now provide a basis for analysis. In this paper, we use data from the OECD International Trade in Services Statistics 2001 database to conduct an analysis of trade in financial services based on standard theories and empirical techniques for international trade. Our results suggest that the key concepts of international trade are of use in understanding international trade flows in financial services. In particular, we find evidence of significant volumes of intra-industry trade in financial services, as well as significant volumes of inter-industry trade for some countries, including the UK. Using Balassa's ‘revealed comparative advantage’ index, the most highly ranked countries are Belgium-Luxembourg, Italy, Switzerland, the UK, the USA and Greece. Using the ‘net export ratio’, the countries that are ranked highest include Germany, Switzerland, the UK, the USA and Belgium-Luxembourg.

Suggested Citation

  • Allan Webster & Philip Hardwick, 2005. "International trade in financial services," The Service Industries Journal, Taylor & Francis Journals, vol. 25(6), pages 721-746, September.
    • Handle: RePEc:taf:servic:v:25:y:2005:i:6:p:721-746
    DOI: 10.1080/02642060500103266
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    Cited by:

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    2. Rabia Khatun, 2016. "Relation between Trade in Financial Services and Economic Growth in BRICS Economies: Cointegration and Causality Approach," Global Business Review, International Management Institute, vol. 17(1), pages 214-225, February.
    3. Milsom, Luke & Pažitka, Vladimír & Roland, Isabelle & Wójcik, Dariusz, 2023. "The gravity of syndication ties in international equity underwriting," Bank of England working papers 1021, Bank of England.
    4. Yushi Jiang & Muhammad Irfan Khan & Syed Imran Zaman & Athar Iqbal, 2021. "Financial development and trade in services: Perspective from emerging markets of Asia, South and Central America and Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3306-3320, July.
    5. Jean-Jacques Nowak & Sylvain Petit & Mondher Sahli, 2012. "Intra-Tourism Trade in Europe," Tourism Economics, , vol. 18(6), pages 1287-1311, December.
    6. Camilla Jensen & Jie Zhang, 2013. "Trade in tourism services: Explaining tourism trade and the impact of the general agreement on trade in services on the gains from trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(3), pages 398-429, April.
    7. Ka Ming Cheng, 2021. "Financial And Insurance Services Trade: Does Exchange Rate Or Income Matter?," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 494-509, January.
    8. Allan Webster & John Fletcher & Philip Hardwick & Yeganeh Morakabati, 2007. "Tourism and Empirical Applications of International Trade Theory: A Multi-Country Analysis," Tourism Economics, , vol. 13(4), pages 657-674, December.
    9. David VanHoose, 2013. "A Model of International Trade in Banking Services," Open Economies Review, Springer, vol. 24(4), pages 613-625, September.

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