regulatorybarriers to trade in services: a new database and composite indices · 2018. 5. 9. ·...
TRANSCRIPT
REGULATORY BARRIERS TO
TRADE IN SERVICES: A NEW
DATABASE AND COMPOSITE
INDICESSebastian Benz, Janos Ferencz and Hildegunn Kyvik Nordås
• Trade policy analysis requires data on trade and trade restrictions
• The Australia Productivity Commission developed trade restrictiveness indices in the late 1990s:– A cross-section based on information from the
mid 1990s– 8 sectors 35-135 countries
• Borchert et al (2012) cross-section covering 103 countries in 2008; partial updates
Background/predecessors
• Covers 22 sectors, 44 countries and four years
• Annual updates• Extension of country coverage:
– Malaysia and Thailand (2018)– Four more (2019)
OECD STRI – the first time series of trade restrictions
• The measures:– Organised under five policy areas– Consistency across sectors versus capturing sector
specificity:• A core set of measures common to all sectors• Sector-specific measures in e.g. telecommunications,
financial services, transport, professional services• The information
– De jure – gathered from laws, regulations, decrees etc.
– Covers MFN (and behind the border regulations)• https://sim.oecd.org/
The database
Sector MeasureAll Foreign equity restrictionsAll Labour market tests for ICT, ISS and CSS Tele Interconnection is mandatedTele Number portability is requiredBanking Interest rates are regulatedBanking Restrictions on raising capital domestically for foreign owned banksLegal Nationality or citizenship is required for license to practiceLegal Commercial association between licensed lawyers and other
professionals is prohibited
Examples of measures
• Binary scoring combined with thresholds, hierarchies and complementarities to capture complexities
• Weights based on expert surveys (30-50 experts per sector)
• One-to-one relationship between qualitative data and indices - replicable
• Regulatory heterogeneity indicators • http://stats.oecd.org/
From qualitative data to indicators: scoring and weighting
The STRIs for telecommunications, 2017
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
DN
KIR
LU
SALU
XLV
AAU
TPR
TD
EU GR
CSV
KSV
NG
BRSW
EN
LD CZE
LTU
FRA
HU
NAU
SPO
LJP
NES
PIT
ABE
LN
ZL EST
FIN
MEX
TUR
CHE
CRI
CHL
COL
KO
RZA
FIS
RBR
ACA
NN
OR
ISL
CHN
RU
SIN
DID
N
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
STRI commercial banking, 2017
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
LVAIR
LESP
KORDEU
CZESVN
DNKGBR
NZLAUS
FRANLD IT
ACAN
ESTLTU
LUXSWE
PRTJPN
CHLSVK
FIN AUTUSA
GRCCRI
POLBEL
HUN ISRTUR
NORCHE
ZAFCOL
RUSMEX ISL
CHNBRA
IDN
IND
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
STRI legal services
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
LVAAUS
CHLCAN
CRISWE
GBRFIN COL
MEXUSA
ITA
IRL
RUSNZL
DEUNLD
CZEDNK
NORBEL
BRAZAF
ESPISR
AUTCHE
KORLTU
PRTCHN
SVKSVN
ESTGRC ISL
JPNFRA
TURHUN
IDN
IND
LUXPOL
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
Changes from 2016 to 2017
-0.15-0.1
-0.050
0.050.1
0.150.2
0.250.3
Mot
ion
pict
ures
Tele
com
mun
icat
ions
Soun
d re
cord
ing
Com
pute
r ser
vice
s
Bro
adca
stin
g
Cus
tom
bro
kera
ge
Rai
l fre
ight
tran
spor
t
Frei
ght f
orw
ardi
ng
Stor
age
and
war
ehou
sing
Car
go-h
andl
ing
Dis
tribu
tion
serv
ices
Roa
d fr
eigh
t tra
nspo
rt
Air
trans
port
Mar
itim
e tra
nspo
rt
Cou
rier s
ervi
ces
Acc
ount
ing
serv
ices
Com
mer
cial
ban
king
Insu
ranc
e
Lega
l ser
vice
s
Con
stru
ctio
n
Engi
neer
ing
serv
ices
Arc
hite
ctur
e se
rvic
es
Digital network Transport and distribution supply chain Market bridging andsupporting services
Physicalinfrastructure
services
Cumulative trade liberalisations (2016 to 2017) Cumulative trade restrictions (2016 to 2017)
Regulatory heterogeneity indicators
Legal services Telecommunications Commercial BankingDEU NLD 0.153 GRC ESP 0.119 CZE SVN 0.114CAN USA 0.156 CZE SVK 0.123 LVA LTU 0.118NLD NZL 0.167 SVK SVN 0.123 CZE SVK 0.132
CHN POL 0.514 CHN ISR 0.555 IDN ITA 0.563
CHN SVK 0.515 IND CAN 0.560 IDN CZE 0.563
CHN FRA 0.530 IDN ISR 0.562 IDN LUX 0.605
BaselineWith interaction
termsBilateral
STRILn distance -0.633*** -0.524*** -0.521***Ln exporter GDP 0.680***Ln importer GDP 0.671***Exporter STRI -4.001*** -4.067**Importer STRI -3.109*** -4.243***FTA -0.166 -1.306* 0.243*Common land border -0.163 0.204* 0.178
Common language 0.777*** 0.335** 0.406***
Common colonial history 0.111 0.094 0.08Same country 0.460* 0.368** 0.408**Exporter STRI * FTA 7.173**
Importer STR *FTA 1.033Bilateral STRI -3.270**Year fixed effects Yes Yes YesCountry fixed effects No Yes YesPseudo R2 0.832 0.927 0.925N 3548 3548 3548
How well do the STRIs explain services trade? Gravity
STRI sector Performance indicator Coeff,STRI
Cargo handling Logistics performance -1.138***Banking ATM density -1.467**Banking Interest spread 5.013**Telecommunications Broadband density -1.783***Telecommunications Secure server density -2.335***Legal Legal rights -3.878***Legal Time for insolvency 0.897***
Why the impact on exports?
Control for GDP and GDP per capita
• The STRI database and indicators a rich source of information on de jure trade policy in force
• Comparable across countries and over time – and to some extent across sectors
• Time series – will continue to be updated every year
• Limitations: – Does not capture preferences
• An intra-EU STRI database is in the pipeline• “Water” in the GATS and RTAs
– May underestimate restrictiveness when rule of law is weak
Summing up
STRI Suite of Tools
Regulatory database
Compare countries
Policy simulator
Country and sector notes
Research papers
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