The Services Trade Restrictions Database

Transcription

1 The Services Trade Restrictions Database Ingo Borchert Batshur Gootiiz Aaditya Mattoo Development Research Group The World Bank Joint Kiel Institute World Bank Workshop on Services 23 May 2012

2 Motivation: Policy Transparency Limited knowledge on patterns of service trade policy, despite the importance of services sectors in terms of both output and international transactions Services Trade Restrictions Database is a first step in: advancing national policy reform by facilitating the analysis of services policies; informing international negotiations by providing data on actual policies; provoking dialogue and refinements by making information on policies publicly available. 2

3 Structure of presentation 1. Overview of Database features a. Coverage (countries, sectors, modes, policy measures) b. Measurement of restrictiveness 2. Global patterns of services trade barriers 3. Do policy barriers matter? a. Investment flows b. Access to services: banking, telecom c. Index validation 3

4 Data: country coverage 103 countries (of which 79 developing) (37) (44) (17) (4) (1) No data (105) 4

5 Data: sector/mode coverage Sectors/Sub-sectors Mode 1 Mode 3 Mode 4 Banking Bank lending x x Deposit acceptance x x Insurance Automobile insurance x x Life insurance x x Reinsurance x x Telecom Fixed-line Mobile Retailing Retail distribution Transport Air passenger domestic x Air passenger international x x Maritime shipping international x x Maritime auxiliary services x Road trucking x Railway freight x Professional Services Accounting x x x Auditing x x x Legal advice foreign law x x x Legal advice dom law x x Court representation x x x x x 5

6 Data: policy coverage Policy dimensions covered: Barriers to foreign entry and ownership Licensing requirements Restrictions on operations Regulatory environment Focus is on measures that discriminate against foreign services and service providers; but we also cover certain non-discriminatory measures which significantly affect trade. Policy information was collected through detailed questionnaires administered by local law firms and governments were given the opportunity to comment (about half did). 6

7 Qualifications 1. Absence of cross-sectoral data on market structure means we are capturing restrictions on entry and not the prevailing extent of competition. 2. Limited information on prudential and pro-competitive regulation makes it hard to assess : how far such measures offer additional protection how far the effect of liberalization depends on the state of regulation 3. Limited information on, and difficult assessment of, actual implementation of policies, such as licensing requirements. Fortunately, some evidence in Doing Business and Investing Across Borders. 4. Paucity of comparable data on (sector-specific) outcome variables - prices, quality, diversity of services - makes it hard to infer restrictiveness of policy by estimating impact on outcomes. But we try! 7

8 Measuring policy restrictiveness Real value of the Database is the rich information on a range of policy variables. But there is also a need for measures that facilitate depiction of patterns and empirical analysis. Three approaches: The Services Trade Restrictiveness Index (STRI) scores based on expert judgment on a five-point scale from completely open to completely closed [0, 25, 50, 75, 100] Ordinal Ranking of Policy Combinations ranks different combinations of policy at the country-sector level in terms of relative openness Measuring restrictiveness by impact using econometric approaches estimates the restrictiveness of policies based on their impact on some outcome variable of interest, controlling for other determinants 8

9 Global patterns Country-level STRI and per-capita income: ETH ZWE IND IRN QAT DRC BDI PHL EGY IDN NPL BGD VNM JOR TUN MYS OMN BHR KWT CHN THA PAN LBN SAU LKA NAM DZA BWA MWIUGA ZAF BLR VEN TZA YEM MLI KEN RWA LSO CIVCMR NGA PAK CRIMEX UKR URY KHMUZB TUR RUS ITA FRA CHL ZMB HND MAR PRT KORJPN BEL FIN MOZ MDGGHA SEN KGZ PRY GTM ALBBRA AUS DNK CAN COL PERKAZARGHUN BGR MUS CZE GRC NICMNGBOL ROM ESP DEU AUT USA GEO ARM DOM POL LTU GBR SWE TTO NZL NLD IRL ECU Log of GDP per capita Note: GDP per capita 2007, PPP (constant 2005 internat US$) 9

10 Global patterns STRI by sector and region: GCC SAR MENA EAP AFR LAC OECD ECA Note: 103 countries included. Financial Telecom Retailing Transportation Prof.Services 10

11 Analyzing the impact of policies 1. How do services policies shape investment flows? Cross-country, cross-sector inbound FDI flows Telecom market structure 2. How do they affect access to services? Banking Air passenger transportation 3. Are estimated effects of policy measures consistent with simple approach to constructing an STRI? 11

12 (1) Investment flows How does policy restrictiveness affect global M&A activity? (1) (2) (3) (4) All Cntr Dev Cntr All Cntr Dev Cntr Log(GDP) *** *** *** *** Log(GDP per capita) *** *** *** *** Population Density (people/sqkm) * ** STRI low STRI intermediate * STRI high ** *** No Investment (0%) *** ** Minority Ownership *** * Limit number of licenses Discrim licensing criteria *** ** Restriction repatr earnings ** ** No recourse/appeal ** * Observations Pseudo R-sq Log L e e e e+05 Dependent variable is total value of sectoral M&A inflow in million USD; Poisson estimation with robust standard errors based on 8 services sectors; Sector fixed effects included but not reported. 12

13 (1) Telecom market structure Can concentrated markets be partly attributed to policy regime? (1) (2) (3) (4) (5) (6) Fixed line Mobile OLS OLS IV OLS OLS IV Log GDP (2007) *** *** *** *** *** *** ( ) ( ) ( ) ( ) ( ) ( ) Log GDP p.c. (2007) * ** *** *** ( ) ( ) ( ) ( ) ( ) ( ) Urban population (% of total) ( ) ( ) ( ) (8.0325) (8.6059) (9.6040) Population Density (people/sqkm) (0.8240) (0.6933) (0.9776) (0.4587) (0.5504) (0.6303) LLC Dummy *** ** ( ) ( ) ( ) ( ) ( ) ( ) Africa Dummy * ( ) ( ) ( ) ( ) ( ) ( ) License Limit *** * ( ) ( ) Public Lic Criteria * *** ( ) ( ) Foreign Ownership Limit * ** (7.6787) (6.3750) Indep Regulator ( ) ( ) STRI Tel Fixed M ** *** ( ) (1.4e+03) STRI Tel Mobile M *** *** ( ) (1.6e+03) Constant *** *** *** *** (1.9e+03) (1.8e+03) (2.2e+03) (1.5e+03) (1.5e+03) (1.7e+03) Obs Log L R-sq H0: exogenous reg

14 (1) (2) (3) Log(GDP) *** *** *** Log(Population) *** *** *** Population Density (people/sqkm) * * (2) Access to services How does policy STRI restrictiveness low affect access to credit for the private sector: STRI intermed STRI high *** Restr on Branches only (1) (2) (3) Log(GDP) Operational 2007 Restr *** *** *** *** Log(Population) Major Restr Establishment *** *** *** *** Population Density (people/sqkm) * * No acquisitions (0%) *** STRI Minority low ownership STRI Limit intermed number of licenses ** STRI Restriction high repatriation earnings *** Restr No recourse/appeal on Branches only Operational No branch entry Restr *** Major Restr on Restr cross-border Establishment trade *** Constant No acquisitions (0%) *** Minority Observations ownership Limit R-squared number of licenses ** Restriction Dependent repatriation variable is domestic earnings credit to the private sector (% GDP). Linear No regression recourse/appeal with robust standard errors. Domestic credit as a percentage of GDP No is taken branch from entry the World Development Indicators for the year For Kyrgyztan Restr the corresponding on cross-border 2007 trade figure and for Zimbabwe the 2006 figure is used for want of Constant missing 2008 values in both countries Observations

15 (2) Access to services Air passenger transportation: intensive margin vs extensive margin (1) (2) (3) (4) (5) (6) OLS IV F-STRI F/A-STRI A-STRI F-STRI F/A-STRI A-STRI Log GDP (2007) *** *** *** *** *** *** (0.0381) (0.0328) (0.0346) (0.0460) (0.0346) (0.0355) Log GDP p.c. (2007) ** *** ** *** (0.1255) (0.0723) (0.0866) (0.1233) (0.0756) (0.0826) Urban population (% of total) (0.0049) (0.0030) (0.0033) (0.0053) (0.0033) (0.0033) Population Density (people/sqkm) (0.0003) (0.0002) (0.0003) (0.0002) (0.0002) (0.0003) Percent Tourists/Population ** * * ** ** ** (0.1359) (0.0570) (0.1042) (0.1321) (0.0546) (0.1012) LLC Dummy (0.1602) (0.1269) (0.1590) (0.1655) (0.1269) (0.1738) Africa Dummy * * (0.1666) (0.1468) (0.1771) (0.1702) (0.1525) (0.1795) airports paved runways ** ** (0.0001) (0.0000) (0.0000) (0.0001) (0.0000) (0.0000) STRI intermed *** (0.1319) (0.0961) (0.1127) STRI high *** *** (0.1317) (0.1106) (0.1346) STRI AirPass M * ** (0.8168) (0.6279) (0.5799) Constant *** *** * *** *** ** (0.9141) (0.5329) (0.6592) (0.9164) (0.5996) 15 (0.6581) Obs

16 0 Estimated Index based on M&A (3) Methodology (1) (2) (3)(1) (4)(2) (3) (4) All Cntr Dev Cntr All All Cntr Cntr Dev Dev Cntr Cntr All Cntr Dev Cntr Log(GDP) *** *** *** *** *** *** *** *** 7 Log(GDP *** per capita) *** *** *** *** *** *** *** ple/sqkm) Population Density (people/sqkm) (1) (2) * (3)(1) ** (4)(2) * (3) ** (4) All Cntr Dev Cntr All All Cntr Cntr Dev Dev Cntr Cntr All Cntr Dev Cntr STRI low Log(GDP) *** *** *** *** *** *** *** *** STRI intermediate * * Log(GDP *** per capita) *** *** *** *** *** *** *** STRI high ** *** ** *** ple/sqkm) Population Density (people/sqkm) * ** * ** A Comparison of the STRI with an Econometric Estimate of Restrictiveness: No Investment (0%) *** ** *** ** STRI low Minority Ownership *** * *** * STRI intermediate * * s Limit number of licenses STRI high ** *** ** *** Discrim licensing criteria *** ** *** ** gs Restriction repatr earnings ** ** ** ** No Investment (0%) *** ** *** ** No recourse/appeal ** * ** * Minority Ownership *** * *** * s Limit number of licenses Observations Discrim licensing criteria *** ** *** ** Pseudo R-sq gs Restriction repatr earnings ** ** ** ** Log L e e e e e e e e+05 No recourse/appeal ** * ** * tal value of Dependent sectoral M&A variable inflow is total in million value USD; of sectoral M&A inflow in million 0 USD; STRI (mode 3) robust standard Poisson errors estimation based with on 8 robust services standard sectors; errors based on 8 services sectors; Observations Note: weighted average 478 of sectoral indices 328 (Table A.1) uded but not Sector reported. fixed effects included but not reported. Pseudo R-sq Log L e e e e e e e e+05 tal value of Dependent sectoral M&A variable inflow is total in million value USD; of sectoral M&A inflow in million USD; robust standard Borchert/Gootiiz/Mattoo Poisson errors estimation based with on 8 -- robust services Services standard sectors; Trade Restrictions errors based Database on 8 services sectors; 16

17 Looking ahead Improving the coverage and quality of data Refining quantification methodologies Rigorous analyses of the impact of policy choices Investigation of the determinants of policy choices Borchert/Gootiiz/Grover/Mattoo -- Landlocked or Policy Locked? 17

18 Additional Slides Borchert/Gootiiz/Grover/Mattoo -- Landlocked or Policy Locked? 18

19 (2) Subsample differences Landlocked countries have more restrictive policies than coastal countries in air transport and telecommunications Air transport Telecom Coastal Landlocked 19

20 Comparison of policies Heterogeneity within landlocked countries: Telecom policies Landlocked countries: STRI Telecom M0 Air transport policies Landlocked countries: STRI overall air AFR ETH ZMB RWA BWA ZWE MWI MLI LSO UGA AFR ZWE BWA LSO UGA RWA MLI MWI ETH ZMB ASIA NPL LAO MNG ASIA NPL MNG LAO ECA BLR UZB KAZ KGZ ARM ECA KGZ KAZ ARM BLR UZB LAC PRY BOL LAC BOL PRY OECD HUN CZE AUT OECD HUN AUT CZE W D L W D L Borchert/Gootiiz/Grover/Mattoo -- Landlocked or Policy Locked? 20

21 Telecom: mainlines/subscriptions (1) (2) (3) (1) (2) (3) F-OLS F-OLS F-IV M-OLS M-OLS M-IV Log GDP (2007) *** Log GDP *** (2007) *** (0.6573) (0.6778) (0.6719) (1.5264) (1.4774) (1.4775) Log GDP p.c. (2007) *** Log GDP *** p.c. (2007) *** *** *** *** (1.7905) (1.8087) (1.7524) (2.9013) (2.6189) (2.7118) Urban population (% of total) Urban population (% of total) (0.0647) (0.0714) (0.0799) (0.1331) (0.1372) (0.1379) Population Density (people/sqkm) Population Density (people/sqkm) ** (0.0035) (0.0038) (0.0038) (0.0121) (0.0120) (0.0120) Africa Dummy Africa Dummy (2.7466) (2.8603) (3.0360) (4.9500) (4.6949) (5.0101) LLC Dummy LLC Dummy * ** (2.4563) (2.3725) (2.9229) (3.9509) (4.1121) (4.2005) Log HHI residual Log HHI residual *** ** ** (0.0004) (0.0005) (0.0006) (0.0015) (0.0015) (0.0016) STRI (F) = ** STRI (M) = ** (2.4903) (5.6347) STRI (F) = (2.5797) STRI (M) = *** (5.5890) STRI (F) = (8.2894) STRI (M) = *** ( ) STRI (F) = (4.5554) STRI (M) = ** (8.3479) STRI Fixed Line STRI Mobile ** *** (4.0397) (7.8692) (7.8014) ( ) Constant *** Constant *** *** *** *** *** ( ) ( ) ( ) ( ) ( ) ( ) Obs Obs Log L Log L R-sq R-sq H0: exogenous reg H0: exogenous reg

22 Telecom: mainlines/subscriptions (1) (2) (3) (4) (5) M-OLS M-OLS M-OLS M-OLS M-OLS Log GDP (2007) * * * * * (1.4972) (1.4072) (1.5230) (1.5144) (1.5597) Log GDP p.c. (2007) *** *** *** *** *** (2.6757) (2.7566) (2.9678) (2.7830) (2.6785) Urban population (% of total) (0.1426) (0.1407) (0.1501) (0.1420) (0.1451) Population Density (people/sqkm) (0.0105) (0.0116) (0.0105) (0.0109) (0.0119) Africa Dummy (4.8912) (4.5889) (4.7865) (5.2421) (4.9394) LLC Dummy (4.5384) (4.3037) (4.5809) (4.8433) (4.6098) Log HHI residual ** * * (0.0017) (0.0014) (0.0017) (0.0016) (0.0015) VoIP/IG not allowed ** (4.7472) (4.9653) Minority stake publ *** ** (4.2341) (4.9144) License Limit (4.6228) (4.1854) Public Licensing Criteria ** (6.8861) (7.4526) Independent Regulator (4.6506) Constant *** *** *** *** *** ( ) ( ) ( ) ( ) ( ) Obs Log L R-sq Dependent variable: Number of mainlines/cellular subscriptions per 100 people 22

23 Air passenger transport (1) (2) (3) OLS-STRI OLS-STRI IV-STRI Log GDP (2007) *** *** *** (0.0381) (0.0393) (0.0460) Log GDP p.c. (2007) ** ** ** (0.1255) (0.1224) (0.1233) Urban population (% of total) (0.0049) (0.0049) (0.0053) Population Density (people/sqkm) (0.0003) (0.0003) (0.0002) Percent Tourists/Population ** ** ** (0.1359) (0.1325) (0.1321) LLC Dummy (0.1602) (0.1585) (0.1655) Africa Dummy (0.1666) (0.1673) (0.1702) airports paved runways (0.0001) (0.0001) (0.0001) STRI intermed (0.1319) STRI high *** (0.1317) STRI AirPass M ** * (0.2738) (0.8168) Constant *** *** *** (0.9141) (0.8780) (0.9164) Obs Log L R-sq Borchert/Gootiiz/Mattoo H0: -- Services exogenous Trade reg Restrictions Database

24 Global patterns Pattern of restrictions: comparison of bank lending and automobile insurance, percentage of implementing countries: Bank Lending Comparison of Openness Banking vs Insurance Automobile Insurance 14% 29% 20% 13% 38% 11% 4% 23% 19% 6% 22% 1% No restrictions Operat Restr only Major Restr Establ only Restr on CB/Branch Operat Restr + CB/Br Restr Major Restr Establ + CB/Br No restrictions Operat Restr only Major Restr Establ only Restr on CB/Branch Operat Restr + CB/Br Restr Major Restr Establ + CB/Br 24

25 Big (data) picture Relationship to other databases on policies and outcomes: Subject: Affecting foreign providers Affecting all providers Policy or Regulation Services Trade Restrictions Database OECD Product Market Regulation Administrative or procedural requirements/outcomes WB/IFC Investing Across Borders WB Doing Business; OECD Product Market Regulation Other related datasets: 1. TSDv4: cross-modal services trade flows 2. FinStats 3. Logistics Performance Index (LPI) 4. ITU s ICT Indicators 5. 25