The Productivity Effects Of Services Liberalization: Evidence From The Czech Republic

Topics:
Organization
Tags:
Czech Republic,
Finance,
Free Trade,
Liberalization,
Manufacturing,
Services Liberalization
Source:
Bocconi University

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Overview: While there is considerable empirical evidence on the impact of liberalizing trade in goods, the effects of services liberalization have not been empirically established. This paper examines the link between services sector reforms and the productivity of manufacturing industries relying on services inputs. The results, based on firm-level data from the Czech Republic for the period 1998 - 2003, show a positive relationship between services sector reform and the performance of domestic firms in downstream manufacturing sectors. When several aspects of services liberalization are considered, namely the presence of foreign providers, privatization and the level of competition, it is found that allowing foreign entry into services industries may be the key channel through which services liberalization contributes to improved performance of downstream manufacturing sectors.

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Format: PDF | Size: 243KB | Date: Apr 2006 | Pages: 33

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