Contribution to Book
Dynamic effects of European services liberalisation: more to be gainedGlobalisation challenges for Europe. Report by the Secretariat of the Economic Council, Prime Minister's Office (2006)
Europe’s market for services is fragmented by many regulatory barriers. The Services Directive proposed by the European Commission aims to integrate national services markets by lowering these barriers. Several studies indicate that bilateral trade and foreign direct investment in services could be boosted substantially. GDP and consumption could increase by 0.5% to about 1% on average in Europe. The effects for the Member States will vary depending on the size of the barriers in their services markets and specialisation. These results take account of scale effects, and forward and backward linkages in the economy, but ignore the effects of more competition on productivity and innovation in the long term. This paper assesses the channels though which an integrated European services market may generate these dynamic gains. Improved market access will stimulate competitive selection and productivity growth. Through trade and investment, knowledge spillovers will increase and innovation will be fostered. These channels are illustrated using some of the scarce quantitative evidence available.
- liberalisation; dynamic welfare gains; EU Internal Market; services; spill-overs
Citation InformationHenk LM Kox and Arjan M Lejour. "Dynamic effects of European services liberalisation: more to be gained" HelsinkiGlobalisation challenges for Europe. Report by the Secretariat of the Economic Council, Prime Minister's Office Vol. Part 1 (2006)
Available at: http://works.bepress.com/henk_kox/18/