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Revealed comparative advantages in the services trade of the United States, the European Union and Japan: what do they tell us?

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  • Langhammer, Rolf J.

Abstract

The paper argues that measuring revealed comparative advantages (RCA) in international trade in services cannot be straightforwardly compared to RCA in trade in goods. The essential difference is that services are internationally exchanged not only by cross-border trade mainly subject to relative resource endowment but also by factor movements (primarily foreign direct investment). The latter modes of supply are determined by characteristics of services such as the need of close producer-consumer proximity. In addition, the policy influence in RCA for trade in services is not dominated by border measures but by a variety of domestic regulations. The paper measures RCA for the US, EU and Japanese service trade and shows strengths on the US side and weaknesses on the Japanese side with the EU in-between. Finally, measuring RCA for US trade in two different modes (cross-border trade and commercial presence) yields similar results in some service sectors but not in all.

Suggested Citation

  • Langhammer, Rolf J., 2004. "Revealed comparative advantages in the services trade of the United States, the European Union and Japan: what do they tell us?," Open Access Publications from Kiel Institute for the World Economy 3429, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:3429
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    File URL: https://www.econstor.eu/bitstream/10419/3429/1/langhammer_advantages.pdf
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    References listed on IDEAS

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    1. Siegfried Bender & Kui-Wai Li, 2002. "The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports," Working Papers 843, Economic Growth Center, Yale University.
    2. Balassa, Bela, 1986. "Comparative Advantage in Manufactured Goods: A Reappraisal," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 315-319, May.
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    Cited by:

    1. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    2. Joanna Stefaniak-Kopoboru & Joanna Kuczewska, 2016. "Export Specialization In Services Of The Visegrad Countries," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 11(2), pages 265-284, June.
    3. Roy, Martin, 2010. "Endowments, power, and democracy: Political economy of multilateral commitments on trade in services," WTO Staff Working Papers ERSD-2010-11, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Maureen Were & Maureen Odongo, 2019. "Competitiveness and diversification of service exports in sub-Saharan Africa: The case of the East African Community," WIDER Working Paper Series wp-2019-89, World Institute for Development Economic Research (UNU-WIDER).
    5. López, Andrés & Niembro, Andrés & Ramos, Daniela, 2014. "Latin America’s competitive position in knowledge-intensive services trade," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    6. Adam A. Ambroziak & Joanna Stefaniak, 2022. "The position of China in trade in services within the European Union," Oeconomia Copernicana, Institute of Economic Research, vol. 13(2), pages 335-354, June.
    7. Makoto Hisanaga, 2007. "Comparative Advantage Structure of U.S. International Services," KIER Working Papers 633, Kyoto University, Institute of Economic Research.
    8. Dimitrios Karkanis & Myrsini Fotopoulou, 2023. "Import Substitution or Just “Catching the Wave”? Evidence from the Greek Manufacturing Exports," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 3-15.

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    More about this item

    Keywords

    trade in services; trade liberalization; EU customs union;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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