Trade in services in Spain. The effect of economic integration

  1. Julio A. Afonso Rodríguez 1
  2. María Santana Gallego 2
  1. 1 Universidad de La Laguna
    info

    Universidad de La Laguna

    San Cristobal de La Laguna, España

    GRID grid.10041.34

  2. 2 Universitat de les Illes Balears
    info

    Universitat de les Illes Balears

    Palma, España

    GRID grid.9563.9

Journal:
Cuadernos económicos de ICE

ISSN: 0210-2633

Year of publication: 2017

Issue: 94

Pages: 155-186

Type: Article

Export: RIS

Abstract

Services export is an increasingly important component of nations’ export basket and it is growing as a share of the world economy. Therefore, it is important to understand the determinants of trade in services and its influence on economic growth. Moreover, it is crucial for policymakers to understand how economic policies, such as joining to a currency union, would affect this type of trade. The effects of economic integration on international merchandise trade have been extensively investigated, but its impact on trade in services has received low attention. This paper aims to fill this gap by exploring the impact of the EMU on international trade in services. Firstly, we highlight the relevance of trade in services for the Spanish case. To that end, we test the effect of export (in services) on economic growth. Results suggest that, although they are not conclusive, there seems to exist a short-run nexus between trade in services and economic growth. Secondly, we explore the impact of the Euro across a set of developed economies. Results suggest a substantial impact of the euro on intra-Eurozone trade in services. Specifically, for the case of Spain, the individual euro’s effect is around 40 per cent, below the average for the rest of the Eurozone.

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