Determinants of international trade in business sector: estimation by gravity model

Abstract

This article examines the determinants of international trade in business sector in the era of expansion of services in global value chains and of expansion of delocalization and outsourcing movements in these services. This work is carried out using a gravity model in order to demonstrate the factors involved in determining the volume of this trade, in the choice of partners and in the implementation of policies to promote the export of business services. A large and heterogeneous sample of countries is chosen in order to draw conclusions that are relevant and valid enough to be applied to the case of MENA countries and African countries. The results of the estimation of our model show that cultural, geographical and colonial relations are important for bilateral trade in services, it shows that the level of exports of services is stimulated by the dynamism of the internal market, by aligning national regulations with international regulations, by harmonizing international systems in the areas of services, by investing more in digital and telecommunications infrastructures and by investing in academic and vocational training in service jobs. These results allows to preparing the ground to highlights the necessary policies of  integration and liberalization of the business service sector and to highlight the partner countries with which the economy in question has a significant potential for trade in this sector. This work shows that MENA countries and French-speaking and English-speaking African countries have a great mutual interest in directing their service export expansion policies towards greater bilateral and multilateral liberalization of trade in professional services.