Services Development and Comparative Advantage in Manufacturing Xuepeng Liu, Aaditya Mattoo, Zhi Wang, and Shang-Jin Wei
Journal of Development Economics, Vol. 144, 102438 (May 2020)
OVERVIEW
We examine how the development of domestic financial and business services sectors may affect the export performance of downstream manufacturing sectors, taking into account the services input intensities of manufacturing sectors. We show that the indirect exports of services (as inputs for manufacturing production) are surprisingly high for a number of countries, especially developing or emerging economies, even though most of these countries’ direct exports of services are relatively small. We find that the manufacturing sectors that use these services intensively as inputs benefit more from domestic services development. We also find that countries may bypass their inefficient domestic services sectors by importing services inputs. This suggests that services trade liberalization may help these countries to overcome inefficient domestic service provision.
22 | Outstanding Impact
Made with FlippingBook - Online catalogs