The Impact of Mode 4 Liberalization on Bilateral Trade Flows

21 Pages Posted: 22 Feb 2006

See all articles by Marion Jansen

Marion Jansen

International Trade Centre

Roberta Piermartini

World Trade Organization (WTO) - Economic Research and Analysis Division

Multiple version iconThere are 2 versions of this paper

Date Written: November 2005

Abstract

This paper gives insights into the possible trade creating effects of service trade liberalization via Mode 4. In particular we expect that temporary movements of persons, like permanent movements, have the potential to reduce transaction costs for merchandise trade between home and host country. Exploiting data on H-1B beneficiaries from different origins in the United States and using a gravity model of trade, we find significantly positive effects of temporary movements of persons on bilateral merchandise trade. In addition to this, the paper provides insights into the determinants of temporary movements of persons.

Keywords: Mode 4, bilateral trade flows, services liberalization, WTO

JEL Classification: C30, F13, F15, F29

Suggested Citation

Jansen, Marion and Piermartini, Roberta, The Impact of Mode 4 Liberalization on Bilateral Trade Flows (November 2005). CEPR Discussion Paper No. 5382, Available at SSRN: https://ssrn.com/abstract=886369

Marion Jansen (Contact Author)

International Trade Centre ( email )

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Roberta Piermartini

World Trade Organization (WTO) - Economic Research and Analysis Division ( email )

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CH-1211 Geneva
Switzerland
+41 22 739 5492 (Phone)
+41 22 739 5762 (Fax)

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