Political relations and service trade: evidence from a panel threshold model

ABSTRACT

This paper investigates linear and nonlinear impacts of political relations on China’s service trade import and export to 8 countries from 2005 to 2019. The result shows that positive effect of political relations on both service trade import and export can be obtained. Using a threshold model, it is found that when the trading country’s economy level reaches the first threshold, the role of political relations will change.

KEYWORDS:

• Political relations
• service trade
• gravity model
• panel threshold model

JEL CLASSIFICATION:

• C23
• F14

Disclosure statement

No potential conflict of interest was reported by the author(s).