ABSTRACT
This article analyzes the effect of manufacturing export performance (MEP) on services export diversification (SED). The analysis covers a sample of 138 countries over the period of 1995 to 2014, and uses the two-step system GMM approach. The findings indicate that higher MEP is positively associated with SED, with the magnitude of this positive effect being higher for less developed countries than for relatively advanced countries. In addition, the positive effect of MEP on SED rises as countries enjoy greater trade liberalization, a higher financial development depth, a higher education level, higher foreign direct investment inflows, and better institutional and governance quality.
Acknowledgments
The author would like to express his gratitude to the two anonymous referees for their comments that helped to greatly improve the quality of the article. This article represents the personal opinions of individual staff members and is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors or omissions are the fault of the author.
Disclosure statement
No potential conflict of interest was reported by the author.
Supplementary material
Supplemental data for this article can be accessed on the publisher’s website.
Notes
3 Studies on the determinants of trade in services (notably services exports) include, for example, Anand, Mishra, and Spatafora (Citation2012); Choi (Citation2010); Clarke (Citation2008); Eichengreen and Gupta (Citation2013a, Citation2013b); Gnangnon and Iyer (Citation2018); Freund and Weinhold (Citation2002); Gani and Clemes (Citation2013); Goswami, Gupta, and Mattoo (Citation2012); Kandilov and Grennes (Citation2010); Karam and Zaki (Citation2013); Kimura and Lee (Citation2006); Li, Moshirian, and Ah-Boon Sim (Citation2003, Citation2005); Lin (Citation2015); Morgan and Snowden (Citation2007); Sahoo and Dash (Citation2014, Citation2017); Sandra and Pelin (Citation2012); Shingal (Citation2010); Sapir and Lutz (Citation1981); Sandeep (Citation2011); and Wong, Tang, and Fausten (Citation2009).
6 The literature has usually classified the activities of the services sector into market and non-market services (see, for example, Gani and Clemes (Citation2013)). The category of market activities encompasses producer services (e.g., banking and finance); distribution services (e.g., transport and storage); personal services (e.g., hotels and restaurants); and communications (e.g., the Internet). The category of non-market services refers to social services, which include health, education, and housing. Thus, in the current analysis, commercial services are included in the category of market services. In fact, commercial services include all services categories except government goods and services, and are sub-divided into goods-related services, transport, travel, and other commercial services (the latter including financial services and other business services) (see WTO (Citation2019)).
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