Working Papers, School of Business, Örebro University
Hildegunn Kyvik Nordås
What drives trade in services? Lessons from the Nordics
Abstract: The contribution of this paper to the literature is to
make an empirical assessment of the relative importance of non-actionable
institutional and cultural factors and actionable policy measures for
services market integration, using the Nordic countries as a case study. It
finds that intra-Nordic trade in services is about 2.5 times larger than
predicted from the gravity model. This may not be surprising since the
Nordics are perceived as a cluster of similar countries, but a detailed
analysis of the Nordics’ policy framework, trade agreements, institutional
and cultural factors concludes that these cannot explain the intra-Nordic
bias. An unexplained “Nordicness” factor of this magnitude indicates that
integration of services markets may rely on deeper institutional and
cultural factors that do not readily lend themselves to trade negotiations.
Conversely, trade agreements may yield the largest benefits among countries
that share common cultural and institutional features.
Keywords: Services trade; trade barriers; regulation; (follow links to similar papers)
JEL-Codes: F13; F14; (follow links to similar papers)
25 pages, April 11, 2017
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