International Competitiveness of Trade in Services in Taiwan : A Gravity Approach
Date Issued
2016
Date
2016
Author(s)
Lien, Bo-Kai
Abstract
Service sector has gradually become a key role to economy in Taiwan. According to Directorate General of Budget, Accounting and Statistics, Executive Yuan, R.O.C., Taiwan''s service sector output has reached to NT$10.4 trillion in 2015, accounting for 62.79% of GDP. Besides GDP, the employment of services was around 6.6 million and has exceeded 59% of total employment in 2015. However, on international trade, Taiwan still lacks international competitiveness. Based on the World Trade Organization, Taiwan’s share of global trade in services exports has been stuck around 1% since 1998. Furthermore, the rank of Taiwan’s service exports fell from 18 to 23 from 2000 to 2015. To recognize the competitiveness of the service industry, investigating the main factors which affect trade in services flows is relatively important. As a result, this thesis analyzes the total services trade flows through gravity model, discusses on the key factors which affects trade in services, compares the national trade competitiveness, and formulates policy objectives. This thesis ran a regression on export of services among top 30 countries from 2005 to 2013 (based on WTO) and calculated the trade in services competitiveness index between countries through models. In addition, models are applied to compare different kinds of service industry, including transportation services, communication services, travel services, financial services, and personal, cultural, and recreational services. The results indicates that Gross domestic product and Gross domestic product per capita, Trade in services imports, Population of the export countries, Foreign direct investment, Freedom of the world index have significant positive influence on the export flow of trade in services. Industry structure and Real exchange rate have significant negative effect on the export flow of trade in services.
Subjects
Gravity model
Trade in services
Trade competitiveness
WTO
Type
thesis
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