Essays On International Trade and Productivity

: A Micro-Level Empirical Investigation on the Implications and Drivers of Global Value Chains, Service Exports and Service Trade Barriers For Advanced Economies

Abstract

This thesis contains three chapters that contribute to our understanding of the relationship between international trade and productivity for advanced economies within the context of Global Value Chains (GVCs), the increasing importance of services in world trade and the deglobalisation trend leading to increased service trade barriers. The first empirical chapter investigates the interrelationship between participation in GVCS, productivity and robot adoption using a panel of OECD countries between 1995 and 2016. The chapter stresses that a bidirectional relationship exists between GVCs and productivity, GVCs and robot adoption, and robot adoption and productivity. The findings show evidence for this bidirectional relationship as we find a positive effect of GVCs on robot adoption and a positive effect of robot adoption on participation in GVCs. We also find a positive effect of GVCs on productivity and a positive effect of productivity on GVCs. However, we fail to find a significant effect of robot adoption on productivity. The second empirical chapter addresses the blurring line between manufacturing and services, focusing on what factors enable manufacturing firms successfully export services. Using a panel of UK manufacturing firms between 2011 and 2018, we find that in addition to productivity and Firm Specific Advantages (FSAs), selling services domestically is an avenue of learning which helps manufacturing firms successfully export services. The third empirical chapter focuses on the effect of service trade barriers on firm productivity and export performance, and also investigates the role of firm heterogeneity and trade policy uncertainty. Using a panel of UK firms between 2014 and 2019, we find a negative effect of service trade barriers on productivity and export performance. We also find that this effect is more pronounced for the firms in the lowest size quartile, and it is also stronger for the period after the Brexit referendum.

Date of Award	Jun 2022
Original language	English
Supervisor	Jun Du (Supervisor) & Mustapha Douch (Supervisor)