From Trade Deficit in Goods to Trade Surplus in Services: An Eclectic and Extended Gravity Model Approach in Analyzing the Determinants of Service Trade of the United States
Master of Arts (MA)
Semester of Degree Completion
Ahmed S. Abou-Zaid
This paper employs an eclectic and extended gravity model of trade to assess the most important determinants of real export and import of services of the United States by analyzing US service trade with its 33 partner countries for 15 years. Distance affects US real export of services negatively, but has no influence on US real import of services. A devaluation of the US dollar increases service export of the United States. We find a positive relationship between US goods trade and US service exports. US outward FDI has a positive impact on US real export of services, but has no significance on US real service imports. Trade freedom of both the US and its partner countries contribute to both the real service exports and imports of the United States. Tariff equivalents of non-tariff barriers and corruption in the importing country have a strong negative impact on the US export of services. Neither regional trade agreements nor a common language contribute to US service trade. Contiguity increases both US export and import of services.
Ahmmad, Tofayel, "From Trade Deficit in Goods to Trade Surplus in Services: An Eclectic and Extended Gravity Model Approach in Analyzing the Determinants of Service Trade of the United States" (2015). Masters Theses. 2359.