This paper analyses the role of services in international trade through the lens of global value chains (GVCs …). Services account for more than 70% of world GDP but only for around 20% of world trade in balance of payments terms. In value … added terms, accounting for services embodied in exported goods, services account for 40% of world trade. However, the …

arm’s length. The model further implies that firms are more likely to offshore when frictions in the provision of services …