Year 2021, Issue 144

Date published

20.12.2021

Table of content

  • Galina Zaharieva
    A COMBINED APPROACH TO EXAMINING FOREIGN TRADE IN SERVICES
    JEL: F14, F32
    Keywords: International trade in services, Gravity Model
    Summary: This paper examines issues related to international trade in services and is exclusively empirical. The foreign trade flows of Bulgaria, Romania and Croatia are the object of study and the subject of study - their dynamics and structure for the period 2000-2020. Theoretical and applied aspects of the research involve specifi ... ... TABLE OF CONTENTS INTRODUCTION 9 CHAPTER ONE. THEORETICAL AND APPLIED ASPECTS OF INTERNATIONAL TRADE IN SERVICES 13 1. Specifics of international trade in services 13 2. Main factors stimulating international trade in services 16 3. The determinants in the empirical research of trade in services by using the Gravity model 20 4. Classification and reporting of international trade in services 26 CHAPTER TWO. CONCEPTUALIZATION AND APPROBATION OF THE GRAVITY MODEL IN TRADE IN SERVICES WITH R 30 1. The gravity model and its application 30 2. Methodology for examining the determinants of international trade 32 2.1. Model specification and parameter estimation method 32 2.2. Sources of information and data processing 36 2.3. Description of the dependent and independent variables 37 3. Assessment of the impact of factors on the export and import of services of Bulgaria, Romania and Croatia 39 3.1. Results of the gravity model of trade in services of Bulgaria 39 3.2. Results of the gravity model of trade in services of Romania 42 3.3. Results of the gravity model of trade in services of Croatia 45 CHAPTER THREE. MONOLATERAL STRUCTURAL ANALYSIS OF TRADE IN SERVICES 49 1. Structural analysis of Bulgaria’s foreign trade 49 2. Structural analysis of Romania's foreign trade 63 3. Structural analysis of Croatia's foreign trade 77 CHAPTER FOUR. ANALYSIS AND EVALUATION OF THE TREND IN TRADE IN SERVICES OF BULGARIA, ROMANIA AND CROATIA (2000 - 2020) 92 1. Index analysis and evaluation of the trend in trade in services based on balance of payments data of Bulgaria, Romania and Croatia (2000 - 2020) 92 1.1. Index analysis methodology of balance of payments positions 92 1.2. Approbation of the methodology for index analysis and evaluation of the trend in trade in services of Bulgaria, Romania and Croatia (2000 - 2020) 97 2. Quality indicators analysis in the dynamics of the balance of services in Bulgaria, Romania and Croatia (2000 - 2020) 121 2.1. Possible indicators for quality assessment in the dynamics of the balance of services 121 2.2. Approbation of quality indicators in the dynamics of the balance of services in Bulgaria, Romania and Croatia (2000 - 2020) 122 CHAPTER FIVE. TRADE INTENSITY ANALYSIS AND ASsessment of FOREIGN TRADE POTENTIAL 128 1. Intensity indicators of trade in services and assessment of foreign trade potential 128 2. Bilateral assessment of export and import potentials 131 3. Analysis of the intensity of import and export of services by partner countries 145 CONCLUSION 156 APPENDICES 158 Appendix 1. Functions of Gravity package 158 Appendix 2. List of countries included in the Gravity model 159 Appendix 3. List of countries with a common official or spoken language included in the Gravity model 160 Appendix 4. Potential for increasing the export / import of services 161 Appendix 5. Growth and the lead–lag relatioship of exports and imports of services by type and countries for the period 2000-2020 based on 2000 162 REFERENCES 164 Abstract This paper examines issues related to international trade in services and is exclusively empirical. The foreign trade flows of Bulgaria, Romania and Croatia are the object of study and the subject of study - their dynamics and structure for the period 2000-2020. Theoretical and applied aspects of the research involve specifics of international trade in services and the main factors contributing to its growth. The Gravity model is used in order to examine how certain determinants affect the volume of exports and imports with R programming language in RStudio Integrated Development Environment. On the basis of balance of payments data and a set of indicators, the dynamics in the volume and structure of exports and imports is analysed and the potential for expanding trade in services of the three countries is assessed. It is concluded that the market size has a positive effect on trade, while geographical distance negatively affects trade. EU membership contributes to the greatest extent to expanding the trade of Romania, to a lesser extent – of Bulgaria, and almost to no extent – of Croatia.