Trade in Services and Its Effects in Developing Countries

Abstract

In this paper, I propose to investigate the impact of trade in services (services import and services export) on the economic growth of CEMAC countries. The stylized facts on trade in services revealed that CEMAC economies are a net importer of services. Services import in value increased by about five times, while services export in value increased by about four times over the period 1987-2015. The share of services export in CEMAC GDP increased slightly from 3.21% to 3.36% during the period 1987-2015, while the share of services import in CEMAC GDP increased from 13.4% to 16.42% during the same period. The CEMAC’s share in world services export and world services import decreased from 0.11% to 0.005% and 0.46% to 0.26% respectively, during the period 1987-2015. I run country and time fixed effect regression with unbalanced panel data covering the period 1987-2015. I find no impact of services export and services import on economic growth in CEMAC economies. Only other traditional determinants of economic growth such as gross fixed capital formation and government expenditure have a positive impact on economic growth. Results also point out a strong negative impact of some period (1994, 2009, and 2015) on economic growth in CEMAC economies. All these are related to specific shocks faced by CEMAC countries, which are respectively the devaluation of Franc CFA, the 2008-2009 financial crisis, and the negative oil price shock. The services export-led economy growth is not held for the CEMAC countries.

Date of Award	31 Jul 2020
Original language	English
Awarding Institution	University of Namur Université Catholique de Louvain
Supervisor	Lorenzo Trimarchi (Supervisor) & Guohao Yang (Co-Supervisor)