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Using a novel database on multinational production (MP), this article investigates the impact of preferential trade agreements on foreign affiliates’ production activities. We find that trade agreements with investment provisions have a positive effect on MP. On average, signing an agreement including investment provisions is associated with increased MP up to 26% in the manufacturing sector and 34% in the services sector. Our findings suggest that investment provisions increase MP by facilitating multinationals operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains.

Intangible capital, a broad category of knowledge-based assets lacking physical embodiment, is a key determinant of value capture in global value chains (GVCs). In this paper, we study how policies that govern the trade–investment–intellectual property nexus help countries to increase returns to intangible assets. Using inter-country input–output tables combined with data on factor income, we estimate returns to measured intangible capital (i.e., intangible assets reported in national accounts) and ‘unmeasured’ intangible capital (captured as a residual) in GVCs for a large number of countries and industries over the period 2005–2015. We use these data in an econometric analysis to examine policy determinants, focusing on the package of disciplines on trade, investment, and intellectual property that are increasingly used by countries in their trade agreements. We find that trade and investment openness, intellectual property protection, and competition enforcement are positively associated with returns to intangible assets measured in national accounts. The relationship with unmeasured intangible capital is more complex regarding intellectual property protection and competition enforcement. Our discussion highlights the importance of striking a balance between the different elements of the nexus in order to maximize a country’s potential to benefit from the growing role of intangibles in GVCs.

Disruptions in global supply chains in the context of the COVID-19 pandemic have re-opened the debate on the vulnerabilities associated with production in complex international production networks. To build resilience in supply chains, several authors suggest making them shorter, more domestic, and more diversified. This paper argues that before redesigning global supply chains, one needs to identify the concrete issues faced by firms during the crisis and the policies that can solve them. It highlights that the solutions that have been proposed tend to be disconnected from the conclusions of the supply chain literature, where reshoring does not lead to resilience, and could further benefit from the insights of international business and global value chain scholars. Lastly, the paper discusses the policies that can build resilience at the firm and global levels and the narrative that could replace the current one to reshape the debate on the policy implications of COVID-19 for global supply chains.

In the last decade, the concept of ‘global value chain’ (GVC) has become popular to describe the way firms fragment production into different stages that are located in different economies. However, recent evidence indicates that there are lower levels of fragmentation of production. Some authors also suggest that supply chains are regional rather than global. We offer a comprehensive review of the evidence based on the 2018 update of the OECD trade in value added database. The ‘made in the world’ narrative is correct when describing the rise of GVCs in the 2000s. But globalization reached a peak in 2012, and since then supply chains are becoming more domestic rather than more regional.

Several papers using intercountry IO tables have developed frameworks to decompose value added in gross exports and to remove potential double-counting in intermediate inputs. But these papers rely...

This paper provides new evidence on the role of intangible capital in global value chains (GVCs) by focusing on the role of multinational enterprises (MNEs) and their foreign affiliates in value capture through intangible assets. Industry-level data suggest that foreign affiliates of MNEs generate more income through intangible capital than domestic-owned firms. Intangible returns from foreign affiliates are found both in the host economy and in foreign-owned firms in other countries participating in the GVC. Some heterogeneity is observed across GVCs with returns to intangible capital of foreign-owned firms concentrated in key manufacturing (chemicals including pharmaceuticals, food products, ICT and electronics, and motor vehicles) and services GVCs (finance and insurance, other business services, wholesale and retail, and telecoms). Five case studies (Adidas, AstraZeneca, Rocket Internet, Starbucks and Tata Consultancy Services) complement the analysis by looking at the role of intangible capital in the GVC of specific MNEs.

Micro-level evidence has emphasised that firms that produce across countries are responsible for a large share of international exchanges of goods, services, capital and knowledge. At the aggregate...

This paper examines the impact of industrial robots on jobs. We combine data on robot adoption and occupations by industry in thirty-seven countries for the period from 2005 to 2015. We exploit differences across industries in technical feasibility – defined as the industry's share of tasks replaceable by robots – to identify the impact of robot usage on employment. The data allow us to differentiate effects by the routine-intensity of employment. We find that a rise in robot adoption relates significantly to a fall in the employment share of routine manual task-intensive jobs. This relation is observed in high-income countries, but not in emerging market and transition economies.

Intangible capital, a broad category of knowledge-based assets that lack physical embodiment, increasingly shapes the distribution of income in global value chains (GVCs). While some intangible assets are reported in national accounts (e.g. R&D or computer software and databases), others are hard to detect in conventional statistics (e.g. brand value or organisational capital). In this paper, we combine information on factor income from national accounts with the OECD Inter-Country Input-Output tables in order to estimate returns to measured (i.e. included in national accounts) and ‘unmeasured’ intangible capital (captured as a residual) in GVCs. We find that total intangible capital accounts for about 27% of income in manufacturing GVCs and that this share has increased between 2005 and 2015 in OECD countries. The paper highlights differences across GVC stages and specific types of GVCs. A significant share of income is captured at the distribution stage, particularly in buyer-driven value chains. An econometric analysis suggests that trade and investment openness are important determinants of patterns in returns to intangible capital in GVCs. Direct public funding of R&D and the quality of intellectual property protection are associated with higher returns to intangible assets.

Production processes are fragmenting across borders with countries trading tasks rather than products. Export statistics based on value added reveal a process of vertical specialisation. Yet, what do countries do when exporting? In this article, we provide novel evidence on functional specialisation (FS) in trade. We find surprisingly large and pervasive heterogeneity in specialisation across countries. A positive (negative) correlation between GDP per capita and specialisation in R&D (fabrication) functions is documented. Specialisation in management and marketing functions is unrelated to income. We show how our approach can be easily extended to study FS in trade at the sub-national level. We argue that this is needed to better understand the potential for regional development under global integration.

This work proposes a new measure of the routine content of occupations and sectors for 20 OECD countries, based on information about the sequence and flexibility of the tasks performed on the job. A negative but weak association emerges between routineness and skill intensity, which suggests the importance of both technological and organizational considerations in the measure of routine intensity. Between 2000 and 2010, employment mainly grew in non-routine occupations, especially in market services, while manufacturing shed routine and non-routine jobs. Changes in shares of employment by routine quartile are dominated by within-effects.

Sous l’effet du progres technique et de l’essor des economies d’Asie, les entreprises ont accentue dans les annees 1990 la fragmentation de leur processus de production. Des « chaines de valeur mondiales » sont apparues et ont contribue a la croissance des echanges et de la productivite. Cependant, le phenomene s’est ralenti apres la crise financiere de 2008-2009 avec le rattrapage de l’economie chinoise, la montee des politiques protectionnistes et de nouvelles mutations technologiques. Ce ralentissement ne signifie pas la fin de la mondialisation mais son entree dans une nouvelle phase ou le commerce jouera peut-etre un moindre role.

How prevalent are services sold together with goods? Using aggregate and micro-data, this report assesses this prevalence so as to gain a better understanding of how firms combine goods and services in their exports. Leaving aside the specific case of distribution services, 'Other business services', 'Construction' and 'Research and development' are the most common services supplied by manufacturing firms. With respect to industries, 'paper and printing', as well as 'repair and installation' come first in terms of prevalence of bundles of goods and services. Since the trade regime is different for trade in goods and trade in services, manufacturing firms engaged in servitisation strategies may face higher trade barriers just by expanding their activities in sectors that are less open to trade. When negotiating trade agreements, policy makers need to take into account complementarities between goods and services, and look at the joint restrictiveness for goods and services.

Global value chains (GVCs) have sharpened the interdependencies between trade and foreign direct investment (FDI). Using a novel micro-level dataset covering about 27 000 corporate relationships of 147 multinational enterprises (MNEs) in 13 sectors, new evidence is provided on how firms organise their production globally by combining trade with investment, and on a range of non-equity, contract-based partnerships. The analysis leads to five stylised facts. First, MNE activities are a combination of trade, FDI and strategic partnerships. All firms rely on a mix of these different types of corporate relationships. Second, the configuration of trade, investment and strategic partnerships varies across sectors, firms and markets. The results highlight considerable firm-level heterogeneity within the same industry and across the different modes of entry. Third, investment performs various functions in GVCs. In addition to traditional forms of FDI such as “market-seeking” or “input-seeking”, investment “in capabilities” or “conglomerate” FDI also account for a relevant share of equity-based relationships. Fourth, support business functions emerge as key building blocks in GVCs, which suggests that policy reforms in transversal services sectors that support all GVCs should merit special attention. Fifth, GVCs display a clear geographical organisation. While domestic corporate relationships may lead to higher volumes of activities, in terms of the number of relationships MNEs have more partners abroad. Moreover, the large majority of GVC interactions take place within OECD countries. Overall, the complex and heterogeneous interlinkages observed in modern firm strategies highlight the importance of ensuring a level playing field for both trade and investment.

Multinational Enterprises (MNEs) play an important role in host countries’ domestic value chains as part of the global activities of these companies in GVCs. MNE affiliates create directly large volumes of output, value added, international trade and jobs, and in addition they generate also important indirect effects. Foreign affiliates in host countries are not only sourcing locally produced inputs, tradeable as well as non-tradeable, but also produce final and intermediate products sold and used within the domestic economy. Based on the OECD Analytical AMNE database, this paper analyses the domestic linkages of MNE affiliates in host economies in order to get better insights in the role MNEs play across countries.

In the last decade, the concept of ‘global value chain’ (GVC) has become popular to describe the way firms fragment production into different stages located in different economies. The ‘made in the world’ narrative suggests that production today is global with inputs coming from all parts of the world before being assembled into final products also shipped all over the world. The empirical basis of this story has however been questioned. On the one hand, recent evidence indicates that there is some kind of ‘deglobalisation’ with a trade slowdown and lower levels of fragmentation of production. On the other hand, some authors suggest that supply chains are regional rather than global. In this paper, we offer a comprehensive review of the evidence based on the 2018 update of the OECD Trade in Value-Added (TiVA) database and indicators counting the number of domestic and foreign production stages, border crossings and geographic length of supply chains. The study covers 1995 to 2016. The made in the world narrative is correct when describing the rise of GVCs in the 2000s. But globalisation has reached a peak in 2012 and since then supply chains are becoming more domestic rather than more regional. The ‘erosion’ in globalisation (i.e. the reduction in the average length of supply chains since 2012) is 52 kilometres per year.

Many studies discuss the “de-industrialization” or “servicification” of economies in both developed and developing countries. Such studies rely on statistics that distinguish a manufacturing from a service sector. But in the age of global value chains (GVCs), it becomes increasingly difficult to disentangle manufacturing from service activities. Goods are produced with services, services are produced with goods, some manufacturing firms are factory-less, and companies tend to sell solutions to customers by bundling goods with services. This business reality has important implications for trade and industry analysis. Against this backdrop, the paper introduces a taxonomy of service activities in GVCs and describes the main statistical challenges in assessing the contribution of manufacturing and services to output, value added, or trade. It then reviews three approaches that take GVCs into account in the analysis of income, comparative advantage, and productivity to address these challenges. As statisticians are working on improving the framework for understanding global production, policymakers should be aware of the blurring lines between goods and services.

This paper investigates the impact of deep integration in preferential trade agreements (PTAs) on multinational production (MP), i.e. the production carried out by firms outside of their country of origin. Using a structural gravity model, we find that tariff reductions have a positive impact on MP of goods. This effect is stronger for foreign affiliates trading intermediate inputs or serving the final demand. However, while deep provisions have no significant impact on foreign affiliates that produce goods, we find that deep integration provisions positively affects foreign affiliates operating in the service sector. These results suggest that the proliferation of PTAs with deep integration provisions has contributed to the growth of multinational production and facilitated the participation of foreign affiliates in global value chains.

This paper looks at market access and national treatment commitments for services in the General Agreement on Trade in Services (GATS) and in 95 regional trade agreements (RTAs) involving the countries that are covered in the OECD Services Trade Restrictiveness Index (STRI). The objective is to quantify the impact of legal bindings on trade in services that result from a reduction in the uncertainty faced by exporters. Bilateral bindings indices are created for five broad service sectors (professional services, computer services, telecoms, financial services and transport services). They indicate how close the sector is from a fully bound regime with no possibility to introduce any new trade barrier, by comparing commitments with the actual trade regime. These bilateral indices are then tested over the period 2000-2014 in a structural gravity model. Despite differences across sectors, the results confirm that the legal bindings typically found in services trade agreements tend to have a positive impact on exports even if no actual liberalisation takes place.

Because of their numerous and large activities across different countries, Multinational Enterprises (MNEs) are believed to be central and dominant actors in the global economy. In addition, it has been argued that the growing fragmentation of production within global value chains (GVCs) in the past decades is largely driven by MNEs. It is remarkable then that despite their acclaimed importance, empirical evidence on MNEs is not widely available and largely incomplete, with data only available for a subset of OECD economies. Based on the new OECD analytical AMNE database including information on MNEs across 43 industries and countries on a bilateral basis, this paper derives new insights on the importance of MNEs today. As the new database also allows the linking with the OECD TiVA database, the new evidence additionally discusses in detail the trade and investment nexus within GVCs and suggests that MNEs’ role in GVCs goes beyond trade and investment policy.

Using the OECD analytical AMNE database, this paper provides new evidence on the services activities of multinational enterprises (MNEs) and discusses the relationship between cross-border trade in services and the production of services through foreign affiliates (“mode 3” trade in services in the General Agreement on Trade in Services). An econometric analysis indicates that policies restricting trade in services (as captured in the OECD Services Trade Restrictiveness Index) are associated with a lower output of foreign affiliates not only in services industries but also in the manufacturing sector. Moreover, services trade restrictions also impact the choice of firms when it comes to engaging in exports or in foreign direct investment to serve foreign markets. Overall, the results in this paper demonstrate the intertwined nature of manufacturing and services activities in global value chains.

In order to better understand the interdependencies between trade and investment in global value chains (GVCs), the OECD has developed a new dataset on the Activities of Multinational Enterprises (AMNE). This dataset starts from official AMNE statistics and combines the information with Inter-Country Input-Output (ICIO) tables to provide new insights on the trade-investment nexus in GVCs. This dataset allows the contribution of domestic firms, multinational enterprises (MNEs) and their foreign affiliates to global trade and production to be assessed. This paper details the methodology that was used to create the data, as well as the main assumptions and challenges in the work.

Financialisation and globalisation have important implications for the functioning of economies and, in particular, for employment. However, their impact on labour market dynamics has not been sufficiently analysed. The aim of this article is to contribute to fill this gap in the literature with a cross-country analysis at the industry level. The authors identify four industry dynamics (Protection, Expansion, Escape from production and Decline with sunk costs) and explore the hypothesis that financialisation is a phenomenon mostly specific to mature developed economies. They provide an econometric analysis at the country and industry level of the relationship between globalisation, financialisation and employment over the period 1995–2009. They estimate a standard labour demand function in which they introduce financialisation as a demand shifter. They also propose a simple model to explain the financialisation phenomenon and provide a regression testing its prevalence, including regressions with an interaction term between offshoring and financialisation. Their result does not point out to a financial-led globalisation but shows that labour is impacted negatively through the financialisation observed in certain industries.

This chapter provides stylized facts about the nature and evolution of Global Value Chains in the Asia–Pacific region, with particular attention to cross-national transfers of value added. The re-organization of production systems based on cross-country comparative advantages had a significant impact on the relative demand for labor by skill levels. Building on progress made in statistics and on advancements in input-output and graph analyses, we map and visualise regional production networks by tracing supply–use relations of goods and services between industries and across borders. This network moved from a simple hub and spokes cluster, centred on Japan, to a much more complex structure following the emergence of China that involved various countries as secondary pivots. We also identified the relative position of countries, which revealed the role and specialisation of each economy in the region’s vertical production system. The paper illustrates the development of value-added flows across countries in relation to major trade agreement schemes. It considers also the effects on employment, which has been a central subject of political debates over time. The demand for low-skilled jobs went down, while the demand for high-skilled tasks increased, across all developed and developing Asia-Pacific economies. The demand for medium-skilled workers, however, presents considerable variations among countries depending on the country’s status of economic development.

Within global value chains (GVCs), services and manufacturing activities are intertwined. This report further investigates the role played by services in GVCs by looking at patterns of specialisation in 23 services industries over the period 2000-2014. Relying on the concept of revealed comparative advantage, it highlights that all countries have a comparative advantage in specific services industries, either in services within manufacturing value chains or in services exported as final products to consumers. A value-added approach is important to analyse the specialisation in services. In addition, there are tangible productivity gains out of this specialisation, as well as gains in terms of employment. Finally, empirical results suggest that services trade restrictiveness negatively affects bilateral flows of service value-added within GVCs. Both domestic reforms and the reduction of barriers in partner countries can benefit services sectors and the activities that rely on services inputs.

This book synthesises recent work by the OECD analysing services trade policies and quantifying their impacts on imports and exports, the performance of manufacturing and services sectors, and how ...

This report provides new evidence on the role of services in global value chains (GVCs). With the release of the Trade in Value Added database, it was highlighted that services account for a larger share of world trade than suggested by traditional statistics. But this evidence does not tell the whole story about services in GVCs. In addition to services bought as inputs, there are also services activities within manufacturing firms. Moreover, manufacturing companies increasingly produce and export services either as complements or substitutes to the goods they sell. This shift to services is related to strategies aiming at adding more value and creating a long-term relationship with customers. The report highlights that services inputs, whether domestic or foreign, account for about 37% of the value of manufacturing exports in the sample of countries covered. By adding service activities within manufacturing firms, this share increases to 53% and the overall contribution of services to exports is close to two-thirds. Across countries, between 25% and 60% of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management and back-office support. SMEs are also part of this “servicification” and contribute to exports of services bundled with goods.

This paper addresses the economic and political economy factors explaining why countries agree upon services commitments in regional trade agreements (RTAs) going beyond the General Agreement on Trade in Services (GATS), what we call the commitments gap. Using a unique dataset comprising of detailed schedules of services commitments disaggregated by sub-sectors and covering almost all countries that are members of a services RTA, we are able to quantify the extent to which geographical, systemic as well as economic and institutional factors correlate with a country’s pattern of RTA commitments that go further than commitments made at the WTO. Strong explanatory variables are asymmetries between negotiating partners and market size, together with endowments in mid-skilled labor and institutional governance. Whereas some of these forces are strongly positively associated with commitments made beyond GATS, others are significant determinants that correlate negatively with a country’s commitment patterns in RTAs. We also find strong differences between services industries providing evidence that not all economic and political economy factors are of equal importance for all services. For instance, financial and construction services often diverge significantly from our general pattern of explanations.

International audience

This work proposes a novel measure of the routine content of occupations, called the Routine Intensity Indicator (RII), built on data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey. The RII uses information about the extent to which workers can modify the sequence of their tasks and decide the type of tasks to be performed on the job. Based on median RII values of individuals in 3-digit occupations across 20 OECD countries, jobs are grouped into quartiles of routine-intensity. On average, in 2012, 46% of employed persons worked in non-routine (18%) or low (28%) routine intensive occupations, with the distribution differing significantly across countries. The relationship between the routine content of occupations and the skills of the workforce is also investigated. While a negative correlation does emerge between skill content and routine intensity – i.e. more routine-intensive occupations tend to be associated with lower skills – this relationship is not necessarily very strong.

This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring and domestic outsourcing. The results suggest that employment in all types of occupations positively relate to innovation. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology and trade, which do not allow for a neat identification of "winners" and "losers" in a GVC context.

This work proposes a novel measure of the routine content of occupations, called the Routine Intensity Indicator (RII), built on data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey. The RII uses information about the extent to which workers can modify the sequence of their tasks and decide the type of tasks to be performed on the job. Based on median RII values of individuals in 3-digit occupations across 20 OECD countries, jobs are grouped into quartiles of routine-intensity. On average, in 2012, 46% of employed persons worked in non-routine (18%) or low (28%) routine intensive occupations, with the distribution differing significantly across countries. The relationship between the routine content of occupations and the skills of the workforce is also investigated. While a negative correlation does emerge between skill content and routine intensity – i.e. more routine-intensive occupations tend to be associated with lower skills – this relationship is not necessarily very strong.

This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring, domestic outsourcing, and the services content of manufacturing. The results suggest that comparatively higher skills are associated with higher employment in non-routine (NR) and low routine-intensive (LR) occupations. Also, employment in all types of occupations, both routine and non-routine ones, shows to positively relate to innovation, as measured by patents. A generally positive relationship also emerges between employment and the ICT intensity of industries, with the notable exception of jobs in high-routine occupations, where ICTs seemingly displace workers. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Conversely, the offshoring of final assembly in manufacturing leads to the shedding of jobs in NR occupations and a relatively higher service content of manufacturing relates negatively with employment in HR occupations. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology, industry structure and trade, which do not allow for a neat identification of "winners" and "losers" in a GVC context. While the effects appear heterogeneous across quartiles of routine intensity, a persistent and positive role of skills and innovative output for employment is found across all quartiles of routine intensive occupations.

The water in the General Agreement on Trade in Services (GATS) refers to the difference between the bound level of trade restrictiveness permitted by the GATS and the actual trade regime. Using the OECD Services Trade Restrictiveness Index (STRI), this report provides estimates of the water in 15 service sectors for 40 countries. The level of water in GATS commitments varies across sectors. It is highest in sectors where most countries have no commitments (unbound), such as audio-visual services or transport services, as well as sectors where countries tend to make commitments only for selected types of activities, such as legal services. The lowest level of water is observed in sectors such as telecoms, construction, computer and distribution services that are also characterised by a more liberal trade regime. Generally speaking, current services trade policies are much more open than what countries have committed in the GATS and sectors that are "unbound" can be fairly open.

This paper presents the services trade restrictiveness indices (STRIs) for logistics services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, the People’s Republic of China, India, Indonesia, the Russian Federation and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for logistics services and captures regulations in force in 2014. The scores range from 0.08 to 1 for cargo-handling services, 0.04 to 1 for storage and warehouse services, 0.02 to 0.58 for freight transport agency services and 0.03 to 1 for customs brokerage services. It is observed that the regulatory profile differs across countries. In cargo-handling and storage and warehouse services, one country reserves all services provision to a statutory monopoly while another country reserves cargo-handling to a monopoly at port. Freight transport agency has the lowest average score among four subsectors while restrictions on foreign entry, restrictions on the movement of people and regulatory transparency significantly contribute to the results. One country is completely closed to foreign participation in customs brokerage services. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.

This paper provides the first evidence linking lower international trade costs with higher productivity in services sectors. On average, lowering trade costs by 10% is associated with a gain in total factor productivity of around 0.5%, which is an effect of similar magnitude to that for goods sectors.

This paper presents the scoring and weighting methodology for calculation of the services trade restrictiveness indices (STRIs) for 18 sectors. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The scoring system is based on binary scoring. To reconcile the complexity of services trade restrictions with binary scoring, non-binary measures are broken down to multiple thresholds; complementary measures are grouped and scored as zero only if all measures in the bundle are not restrictive. Finally in cases where one restriction renders others irrelevant, those measures that are rendered irrelevant are automatically scored one. The paper presents the general methodology that applies to the core measures found in all sectors as well as sector-specific scoring where relevant.

This paper analyses the relationship between regional trade integration and trade costs in servicesindustries. The empirical analysis relies, on the one hand, on a dataset of theory-consistentbilateral trade costs calculated for 61 countries over the period 2000-2011 and, on the otherhand, on an analysis of services commitments in 66 regional trade agreements to which thesecountries are parties. Despite the proliferation of services RTAs in the past decade, we do notfind significantly lower bilateral trade costs among countries having signed such agreements.Several possible explanations are discussed. First, the gaps in services trade data and the difficultyto account for all modes of supply could influence our results. Second, the nature ofservices trade liberalisation makes it difficult to discriminate between domestic and foreignservice providers (thus not impacting the relative costs they face). Third, there is no clear evidencethat countries signing services RTAs do intend to create actual preferences for companiesin partner countries. Services RTAs are about preferential “bindings”. Regionalism in the caseof services seems non-discriminatory and does not lead to trade preferences.

In the past five years, the concept of “global value chain” (GVC) has become popular to describe the way firms fragment production into different stages located in different economies. The “made in the world” narrative suggests that production today is global with inputs coming from all parts of the world before being assembled into final products also shipped all over the world. The empirical basis of this story has however been questioned, suggesting that supply chains are regional rather than global. In this paper we offer a comprehensive review of the evidence based on the World Input-Output Database (WIOD), including new indicators counting the number of domestic and foreign production stages, border crossings and geographic length of the supply chains. The study covers 1995 to 2011. All evidence points in the same direction. The made in the world narrative is correct as far as the direction is concerned, but we still have a long way to go. On average, globalization proceeds at 40 kilometres a year.

This paper presents the services trade restrictiveness indices (STRIs) for construction, architecture and engineering services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for construction, architecture and engineering services and captures de jure regulations in force in 2013. The results for construction services indicate that the overall level of restrictiveness is relatively low, ranging from 0.05 to 0.32, with an average of 0.16. The more elevated levels of restriction can be largely attributed to general measures affecting all sectors of the economy. The STRI also supports the view that architecture and engineering services are less restrictively regulated than other accredited professional services, notably legal and accounting services. The average value for the STRI among the countries in the sample is 0.22 for architecture services, connoting a relatively low degree of regulatory restrictiveness; the corresponding value is only marginally lower, 0.2, for engineering services. The majority of regulations affecting trade in these sectors concern the movement of people.

This paper presents the services trade restrictiveness indices (STRIs) for transport and courier services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for transport and courier services and captures de jure regulations in force in 2013. The STRI supports the view that these services are subject to very different regulatory frameworks and, in some cases, to a relatively elevated degree of regulation. Indices for air transport covering measures affecting commercial establishment and accompanying movement of natural persons are on average quite high (0.43), with little variation across countries. A preliminary assessment of restrictiveness in cross-border trade in the sector shows that, while some progress in easing restrictions has been achieved through open skies agreements, significant limitations remain in place. The maritime transport sector is moderately open with an average STRI of 0.25. Foreign equity restrictions are still quite common in the sector and contribute significantly to the index. Most other sector-specific restrictions are found in the cabotage market and in ports. In road freight transport, the results confirm that the domestic road freight transport regime has been significantly liberalised over the years, and currently commercial establishment in the sector is largely affected by horizontal measures. The overall level of restrictiveness is relatively low with an average of 0.16, but exhibits pretty large variation. With respect to rail freight, the STRI also supports the view that considerable reforms have been undertaken in the sector in the past decades. The average level of restrictiveness is moderate at 0.22, although two countries maintain a statutory state-owned monopoly, which implies that the sector is completely closed to foreign suppliers. Finally, for courier services the results show that the overall level of restrictiveness is moderate with a sample average of 0.26. There is, however, large variation in STRI indices among countries. The elevated levels of restrictiveness are found in countries where foreign equity restrictions or statutory monopolies exist.

This paper presents the services trade restrictiveness indices (STRIs) for financial services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for commercial banking and insurance services and captures regulations in force in 2013. The scores in commercial banking range between 0.06 and 0.55, with a sample average of 0.19. The scores in insurance services range between 0.05 and 0.63, with a sample average of 0.20. The results are mainly driven by restrictions on market entry, where significant impediments remain in the form of foreign equity limits, restrictions on legal form, discriminatory licensing criteria and restrictions on cross-border transactions. Barriers to competition, including regulation of products and prices and preferential treatment granted to state-owned financial institutions, also make a substantive contribution to the index values. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.

This paper presents the services trade restrictiveness indices (STRIs) for the regulated professions of legal and accounting services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for legal and accounting services and captures de jure regulations in force in 2013. The STRI supports the view that legal and accounting services are subject to a relatively high level of regulation. Restrictiveness for legal services ranges from 0.11 to 0.73, with an average of 0.31. Accounting and auditing services show an average of 0.3 and STRI values ranging from 0.13 to 1. The results provide useful policy insights, particularly in order to identify priorities for reform at the national and international levels. Notably, in the case of legal and accounting services, easing a few prominent restrictions could result in a significantly more liberal and competitive market environment.

This paper presents the services trade restrictiveness indices (STRIs) for telecommunications. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for telecommunications and captures regulations in force in 2013. The scores range between 0.06 and 0.61, with a sample average of 0.22. Barriers to competition, reflecting inadequate regulation of incumbents with significant market power, and state ownership in some countries make the largest contribution to the index value, followed by restrictions on foreign entry. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.

This paper presents the services trade restrictiveness indices (STRIs) for computer services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for computer services and captures regulations in force in 2013. The scores range between 0.08 and 0.34, with a sample average of 0.18. Explicit barriers to trade in computer services are rare, but the sector is subject to a number of economy-wide restrictions facing all sectors. Among these, restrictions on movement of people (mode 4 in GATS terminology) make the largest contribution to the index value, followed by regulatory transparency issues. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.