INTERNATIONAL SPECIALIZATION IN SERVICES: INSIGHTS FROM A NEW THEORETICAL TAXONOMY

The persistent assumption of nontradability of service activities led to a general lack of understanding of the role of services in country specialization and performance, in particular in the developed economies. Yet, the share of services in international trade is ever growing, proving their de facto tradability, and questioning about their potential for relocation, or rather relocatability. Relocatability of a service will in turn depend on its degree of territorial anchoring. This paper proposes a new taxonomy of the service activities according to their degree of territorial anchoring, based on the location determinants. Then, for a sample of developed countries, the international specialization is measured for each service activity. It ensues, by crossing results obtained, an inventory of the volatility of services in which countries of the sample are specialized, that can be used as a useful tool for the design of fiscal, social, employment or trade policies.