Working with a panel dataset of OECD countries over the decade 1994-2004, we examine linkages between cross-border trade and FDI in the services sectors. We first develop a consistent analytical framework for the application of the gravity model to both services trade and commercial presence...

This paper investigates empirically the relationship between trade and FDI in services. Using bilateral data on US foreign affiliates' sales and trade as well as data on barriers to FDI, the relationship is investigated using different panel techniques, including fixed effects and...

We put forward the hypothesis that increasing specialisation in the production of non-tradable output has a negative impact on the current account balance. This tradability hypothesis is directly derived from a two-sector inter-temporal current account model. To test it empirically we develop a...

This report counter-poses the patterns of trade specialization and trade diversification of two groups of economies the new member states of the European Union, NMS, and the follower countries of the Soviet Union, the NIS (Newly Independent States). It is shown that the NIS export structures are...

This policy paper, prepared as part of the Background Study for the European Competitiveness Report 2009, analyses the external trade in goods and services between the EU and the BRICs. The paper starts with the analysis of the global position of the EU and the BRICs in world trade (using the...

This study analyses empirically the effects of import competition on firm productivity (TFPQ) using administrative firm-level panel data from German manufacturing. We find that only import competition from high-income countries is associated with positive incentives for firms to invest in...

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences...

There are many costs associated with international trade. These costs act as barriers to trade and affect the level of trade. This paper first provides a brief discussion of the state-of- the-art methods used to measure trade costs and to quantify their impact on trade. It then empirically...

Rules of origin (ROO) are pivotal element of the Greater Arab Free Trade Area (GAFTA). ROO are basically established to ensure that only eligible products receive preferential tariff treatment. Taking into consideration the profound implications of ROO for enhancing trade flows and facilitating...

We derive a real gravity equation and gain several new insights that were hidden in the nominal specification used so far. Most importantly, the real effective exchange rate (REER) of the exporter and, via the importer's terms of trade, also the importer's REER matter, and we can identify the...