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1 Journal of Economic Studies Emerald Article: Revealed comparative advantage and competitiveness in services: A study with special emphasis on developing countries Belay Seyoum Article information: To cite this document: Belay Seyoum, (2007),"Revealed comparative advantage and competitiveness in services: A study with special emphasis on developing countries", Journal of Economic Studies, Vol 34 Iss: 5 pp Permanent link to this document: Downloaded on: References: This document contains references to 46 other documents Citations: This document has been cited by 5 other documents To copy this document: permissions@emeraldinsightcom Access to this document was granted through an Emerald subscription provided by JIMMA UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service Information about how to choose which publication to write for and submission guidelines are available for all Please visit wwwemeraldinsightcom/authors for more information About Emerald wwwemeraldinsightcom With over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services Emerald is both COUNTER 3 and TRANSFER compliant The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation *Related content and download information correct at time of download

2 The current issue and full text archive of this journal is available at wwwemeraldinsightcom/ htm JES 34,5 376 Revealed comparative advantage and competitiveness in services A study with special emphasis on developing countries Belay Seyoum Nova Southeastern University, Fort Lauderdale, Florida, USA Journal of Economic Studies Vol 34 No 5, 2007 pp q Emerald Group Publishing Limited DOI / Abstract Purpose The purpose of this paper is to analyze the competitiveness of selected services: business, financial, transport and travel services in developing countries in relation to that of the rest of the world based on three indices of revealed comparative advantage Design/methodology/approach The study uses revealed comparative advantage (RCA) indices to measure developing countries comparative advantages in selected services for the period Findings Strong comparative advantages exist for many developing countries in transport, and travel services There is substantial room for improvement in financial and business services Trade liberalization and lack of adequate preparation appears to have resulted in a weakening of their comparative advantages over the years However, their revealed comparative advantages remain, by and large, stable and do not show a fundamental shift in the structure of their comparative advantages Originality/value There are no studies examining developing countries comparative advantages in services The findings and policy recommendations can be used by developing countries to improve the competitiveness of their service sectors Keywords Services, Developing countries, Comparative tests, Competitive strategy Paper type Research paper 1 Introduction Services encompass a heterogeneous group of economic activities often having little in common other than that their principal outputs are largely intangible products (Shelp, 1981) It includes both intermediate (construction, distribution, etc) as well as final demand services (tourism, health, education, etc) Services account for an increasing share of employment and GDP in both developed and developing countries The growth of trade in services has outstripped manufacturing Services trade now makes up a quarter of all cross-border trade (Hoekman and Matoo, 2000) In 2003, developing countries exported services estimated at $US 504 billion and this is likely to grow with increasing globalization of their economies and the market access resulting from the widespread deregulation and privatization of state owned corporations (IMF, 2004) There is recognition of the important role of services in many countries The price and quality of services is crucial in determining the competitiveness of goods producers Africa s poor trade performance, for example, is largely attributable to poor infrastructure-based services Limao and Venables (1999) show that a 10 percent decrease in transport costs increased trade by 25 percent In many developing countries, services account for a large proportion of foreign exchange revenues

3 Presently, tourism appears to be the most significant export although they also possess comparative advantages in certain natural-resource based exports such as electric power, water as well as labor-intensive services such as construction Imports of services through foreign direct investment also provide developing countries with inflows of capital and technology thus facilitating economic growth and increased exports The use of information technology has been fundamental in bringing about productivity improvements and new product development Trade in services is subject to protectionism in many countries Such restrictive policies are largely intended to limit the access of foreign services and/or foreign service providers to domestic markets They range from outright prohibitions against foreign providers, reciprocal agreements, licensing and certification requirements, to discriminatory fees and limits to access to distribution and communications systems (Stern, 2002) In his study of market access barriers for services, Hoekman (1996) shows that the benchmark tariff equivalents ranged from about 200 percent for air and maritime transport, postal services, and life insurance to percent for sectors in which market access was less restricted Services in many developing countries have been largely costly and inefficient partly due to the absence of vigorous competition This underscores the need for reforms and the potential for more inflows of capital and technology arising from increases in foreign and domestic investment To date, there is no clear and adequate definition of services However, a broad consensus exists on the characteristics that distinguish trade in services from that of trade in goods Services can be remotely accessed or electronically delivered as opposed to goods that enter through customs They are also intangible, non-storable and characterized with more extensive regulations than trade in goods Trade in services requires the movement of factors of production ie capital or labor thus necessitating commercial presence or the movement of people to the location of the service consumer Unlike the cross-border mode for trade in goods, services can be provided at various locations: locations of the services provider, consumer or at neither of these locations (Abu-Akeel, 1999; Chanda, 2003) The value of trade in services is underestimated because the statistics does not cover trade in services embodied in goods as well as production and sales of foreign affiliates (Hoekman et al, 2002) The lack of precise definition and comparable data on services has partly contributed to limited research in the area To date, there is hardly any theoretical and/or empirical research on the competitiveness of services or its role in promoting exports or economic growth The objective of this paper is to examine the competitiveness of selected services in developing countries compared to international markets The focus on four service sectors (business, financial, transportation and travel) is dictated by the importance (or future potential) of these services for many developing countries and the availability of data Since many countries began to implement their GATT/WTO commitments in services after 1998, this study examines the period The study is organized as follows The following section reviews the literature on competitiveness in services in developing countries Section 3 provides various approaches to measure revealed comparative advantage (RCA) in services Section 4 identifies areas of RCA in services for developing countries Section 5 discusses the stability of RCA indices Section 6 is devoted to summary and implications Comparative advantage and competitiveness 377

4 JES 34, Recent studies on competitiveness in services and developing countries A number of studies suggest that exporting is a less attractive option to gain access to foreign markets in services (Gorg, 2000) Since most services require direct involvement and input from consumers (production and consumption takes place simultaneously), firms have to establish some form of local presence in a foreign market (Winsted and Patterson, 1998; Javalgi and White, 2002) The presence of dynamic service sectors in developing countries is considered critical for the growth and efficiency of a wide range of industries as well as overall economic performance Certain services can directly or indirectly help goods producers become more efficient They provide vital inputs in the form of skills and know-how into the production of export-oriented primary or secondary industries (Thangavelu and Owyong, 2003; Mahadevan, 2002) Sectors such as transportation or financial services, for example, set the conditions under which goods, labor and capital can flow (Mildner and Werner, 2005; United Nations, 2004) A large part of the studies on services and developing countries is devoted to the impact of liberalization (of services) on their economy as well as the level of competitiveness in services Many recent studies explore the potential impact of liberalization of services on developing economies Liberalization of services is expected to offer great growth potential for these countries by fostering foreign direct investment in important services such as banking, transportation, etc as well as knowledge and technology transfers, which stimulates innovation, increasing gains from comparative advantages, enhancing competition, and lowering the costs of production for industries that use services and providing a more efficient infrastructure (Mildner and Werner, 2005) Petrazzini (1996) shows that reforms in the telecommunications sector in 26 Asian and Latin American countries ( ) increased exports by over 20 percent in markets allowing for varying degrees of competition as compared to 3 percent in monopoly markets A number of developing countries have progressively opened up their services sector to foreign investment because they lack the requisite financial and technical capability to meet the demand for certain services such as electricity, telecommunications or banking (Gabrielle, 2004) Some countries, however, fear that liberalization of services will have an adverse effect on their balance of payments A large proportion of foreign direct investment in services is market-seeking and does not contribute to foreign exchange earnings Payments for services can quickly outweigh capital inflows, and thus lead to net foreign-currency losses Profit remittances for example, amount to 35 percent of the total income of services of foreign affiliates of US multinationals in 2002 (United Nations, 2004) Another concern is that many service industries in these countries are insufficiently developed to withstand foreign competition Some scholars believe that trade liberalization can actually reduce competition in small economies because there is little incentive for new companies to enter the market, ie with high entry costs and low potential revenues, liberalization is likely to result in a single incumbent monopoly or oligopoly Some developing countries have used their locational advantages such as low labor costs, appropriate skills and infrastructure to develop competitiveness in certain services They have also attracted foreign investment in services in which they enjoy comparative advantages For example, the export intensity of Indian service industries rose from 58 to 78 percent ( ) accounting for about 21 percent of total exports

5 in 2003 (RIS, 2004) A similar trend is observed in other developing nations such as the Philippines, Malaysia, China, Brazil, Chile, Mexico, Ghana and South Africa (United Nations, 2004) During the period 1998 to 2003, for example, developing countries registered overall increases of over 30 percent in their service exports (IMF, 2004) Apart from these general observations, there are no comprehensive studies on the competitiveness of the service sector in developing countries This study focuses on the degree of competitiveness in business, financial, transportation and travel services based on a random sample of 60 countries from different geographical areas and covers six years ( ) Comparative advantage and competitiveness Measuring revealed comparative advantage The factor proportions theory states that countries should specialize in the production and export of products that use intensively its relatively abundant factor Unlike classical theory, it assumes that the same technology of production would be used for the same goods in all countries (Heckscher, 1949; Ohlin, 1933) and thus does not assume productivity differences According to classical theory, trade between countries is determined by differences in the efficiency of production which arises from differences in technology or the productivity of labor (Ricardo, 1981) Measuring comparative advantages or factor endowment ratios poses certain difficulties since relative prices under autarky are not observable (Balassa, 1989) Balassa (1977) claims that comparative advantage is revealed by observed trade patterns, ie high shares of export markets Revealed comparative advantage (RCA) is one measure of international competitiveness and has gained general acceptance in the literature (Utkulu and Seymen, 2004) It is grounded in conventional trade theory and measures a country s exports of a commodity relative to that of a set of countries The RCA measure has undergone a number of revisions/modifications over the years (Vollrath, 1991; Dimelis and Gatsios, 1995) This study uses three of the commonly used RCA indices to establish existing comparative advantages in services in selected developing countries Data for business, financial, transportation and travel services are obtained from the IMF s (1999, 2000, 2001, 2002, 2003, 2004) Balance of Payments Yearbook The definition of each service covered in the study is provided in Table I The first RCA index employed in this study uses the original index formulated by Balassa (1965): RCA 1 ¼ðXij=XitÞ=ðXnj=XntÞ where X represents exports, i is a country, j is a service, t is a set of exports (all exports) and n is a set of countries (the world) RCA 1 is based on observed trade patterns and measures a country s exports of a service relative to its total exports and to the corresponding exports of all countries in the world Comparative advantage is revealed if RCA 1 is greater than 1 (RCA 1) The alternative measure is a modification of RCA 1 to suit bilateral, regional and other trade specifications (Vollrath, 1991; Dimelis and Gatsios, 1995; Gual and Martin, 1995) In order to determine whether a country has a comparative advantage for any particular service, the country s export share of a given service to that of all services exports is divided by the corresponding figure for all countries This index provides some insight into the national structure of service exports:

6 JES 34,5 380 Table I Revealed comparative advantages (RCAs) for selected developing countries ( ) Business services a Financial services a Transport services a Travel services a RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 Country Argentina Barbados Bolivia Botswana Brazil Bulgaria Chile China Colombia Costa Rica Croatia Czech Republic Dominican Republic Ecuador Egypt El Salvador Estonia Gabon Ghana Guatemala Guyana Haiti Honduras Hong Kong Hungary India Indonesia Iran Israel Jamaica Kenya Korea Madasgascar Malawi Malaysia (continued)

7 Business services a Financial services a Transport services a Travel services a RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 RCA1 RCA2 RCA3 Country Mauritius Mexico Morocco Namibia Nicaragua Nigeria Pakistan Panama Paraguay Peru Phillipines Poland Romania Senegal Singapore Slovakia Slovenia South Africa Sri Lanka Thailand Trinidad and Tobago Tunisia Turkey Uruguay Venezuela Notes: a Business services: services provided by residents to non-residents (or by non-residents to residents) and covers merchandising and trade-related services, operating leasing services and profession/technical services Financial services include financial intermediation services such as letters of credit fees or commissions, credit and banking services (excludes insurance) Transport services includes freight and passenger transportation by all modes and other auxiliary services including rentals of transportation equipment crews Travel services are those services acquired by non-resident travellers (including excursionist) for business and personal use during their visits of less than a year It excludes passenger services which are included in transportation Mean values for RCAs are measured in relation to the rest of the world RCA are shown in italic Source: IMF (1998, 1999, 2000, 2001, 2002, 2003) Comparative advantage and competitiveness 381 Table I

8 JES 34,5 382 RCA 2 ¼ðXij=XisÞ=ðXnj=XnsÞ where X represents exports, i is a country, j is a given service, n is a set of countries (all countries in the world), and s is a set of services (all services) While RCA 1 measures a country s service exports in a given sector in relation to total exports, RCA 2 relates it to all service exports Comparative advantage is revealed if RCA 2 is greater than 1 (RCA2 1) Both indices do not take into account imports The third RCA index (RCA 3) considers exports and imports within a particular service It is derived by subtracting a country s import advantage (RMA) from its relative export advantage (RXA) A similar study was made by Ferto and Hubbard (2003) in their study of the competitiveness of Hungarian agri-food sectors: RXA ¼ RCA 2 ¼ ðxij=xisþ=ðxnj=xnsþ RMA ¼ðMij=MisÞ=ðMnj=MnsÞ where M represents imports, i is a country, j is a service, s is a set of services (all services) and n is a set of countries (all countries in the world): RCA 3 ¼ RCA 2 2 RMA: Comparative advantage is revealed if RCA 3 is greater than 0 (RCA 3 0) The RCA calculations based on observed trade data show that strong comparative advantages exist for many countries in transport, travel and tourism services; comparative advantages for low income countries are limited to travel and tourism, and that many developing countries have not developed comparatives advantages in business and financial services These measures, however, do not account for the effect of government distortions on RCA indices such as quotas or subsidies In spite of this shortcoming, it offers a useful tool to detect comparative advantages in specific sectors 4 Identifying areas of comparative advantage: empirical findings The RCA analysis, largely based on contributions of Balassa (1977) and Vollrath (1991) shows the revealed comparative advantages of developing countries in selected services (Table I) It is primarily intended to examine their global competitiveness as opposed to specific countries or regions Here are the most significant findings of the study: (1) Countries which have revealed comparative advantages in all three indices ( ): business services: India; financial services: Honduras, Trinidad and Tobago; transportation services: Chile, Egypt, El Salvador, Estonia, Gabon, Hong Kong, Kenya, Korea, Pakistan, Panama, Poland, Singapore, Slovakia, and Slovenia; travel services: Argentina, Barbados, Botswana, Bulgaria, Costa Rica, Croatia, Czech Republic, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Ghana, Guatemala, Guyana, Haiti, Honduras, Hungary, Indonesia,

9 Jamaica, Kenya, Mauritius, Morocco, Nicaragua, Peru, Poland, Slovenia, South Africa, Thailand, Tunisia, Turkey, and Uruguay (2) Countries with revealed comparative advantages (RCA) in 1998 but show revealed comparative disadvantages (RCA) in 2003 in one or more indices ie in countries losing their RCAs (RCA! RCD): business services: Brazil, Israel, Turkey and Uruguay; financial services: Brazil, Bulgaria, Colombia, The Czech Rep, Ecuador, Korea, Senegal, Trinidad and Tobago and Uruguay; transport services: Brazil, Ecuador, Gabon, Indonesia, Iran and Turkey; travel services: Botswana,Colombia, El Salvador, Estonia, Guyana, Israel, Kenya, Madagascar and Trinidad and Tobago (3) Countries with revealed comparative disadvantages in one or more indices in 1998 but have revealed comparative advantages in 2003 (RCD! RCA): business services: Argentina; financial services: Estonia, Hong Kong, Hungary, India, Malaysia, Mauritius, Morocco, Pakistan and Tunisia; transport services: The Czech Rep, El Salvador, Pakistan, Singapore, Uruguay and Venezuela; travel services: Bolivia, Costa Rica, Ecuador, Guatemala, Honduras, Malaysia, Malawi, Mauritius, Mexico, Nicaragua, Panama, Peru, Philippines, Sri Lanka, Thailand and Turkey Comparative advantage and competitiveness Consistency of the RCA indices It is important to evaluate the extent to which the RCA indices are consistent in their identification of comparative advantage Balance et al (1987) suggest three statistical tests to measure the consistency of RCA indices: (1) Cardinal measures: cardinal measures identify the extent to which a country has a comparative advantage or disadvantage in a given service Consistency test of such measures is established by comparing correlation coefficients between paired indices ( ) (2) Ordinal measures: consistency tests of RCA indices an ordinal measures determine whether pairs of RCA indices yield a consistent ranking of countries by the degree of comparative advantage Rank correlation coefficients for each service and each pair of RCA indices are calculated ( ) (3) Dichotomous measures: these tests compare alternative indices of comparative advantage to establish the extent to which they are consistent in distinguishing between countries that enjoy comparative advantage and countries that do not ( ) (Balance et al, 1987) The consistency test of the indices as cardinal measures (of RCA indices) shows that all twelve of the correlations are significant at 001 and 005 levels (Table II) The tests indicate that the indices are consistent as cardinal measures of revealed comparative advantage The correlation coefficients are between the average pairs of RCA indices for Similarly, the correlations between the indices as ordinal measures are

10 JES 34,5 384 Table II Correlations among RCA measures to test consistency of indices Cardinal RCA2 RCA3 Ordinal RCA2 RCA3 Nominal RCA2 RCA3 Business RCA1 078* 034* RCA1 083* 010 RCA1 098* 096* services RCA * RCA RCA * Financial RCA1 073* 040* RCA1 093* 026 RCA1 077* 015 services RCA * RCA ** RCA * Transport RCA1 075* 024** RCA1 086* 019 RCA1 073* 059* services RCA ** RCA * RCA * Travel RCA1 065* 063* RCA1 078* 071* RCA1 065* 055* services RCA * RCA * RCA * Notes: * significant at 001 level; ** significant at 005 level Correlations using cardinal, ordinal and nominal measures to test consistency of RCA indices significant for seven of the 12 pairs The tests are based on the rank correlation coefficient of each ordinal measure The nominal measures based on dichotomous pairs of RCA indices (comparative advantage as 1 and comparative disadvantage as 0) also show 11 of the 12 correlations as significant (Table II) The correlations tests confirm that all the three indices are largely consistent in measuring comparative advantages and serve as useful proxies in establishing whether developing countries have comparative advantages in certain services 5 Stability of RCA indices Stability measures of revealed comparative advantage are intended to evaluate any shifts in the structure of a developing country s RCAs in a given service sector over a certain period ( ) A given service may reveal RCA in 1998 and a RCA in 2003 or vice versa (Table III) The relative importance of a certain service is used as a stability indicator (Ferto and Hubbard, 2003; Wilson, 2000) Examining the changes in the distribution of RCAs, developing countries have, by and large, experienced a Services RCA Index RCA, 1998 a RCA, 2003 RCD, 1998 b RCD, 2003 Table III Stability of RCA measured by shifts in comparative advantages between 1998 and 2003 Business RCA services RCA RCA Financial RCA services RCA RCA Transport RCA services RCA RCA Travel RCA services RCA RCA Notes: a Comparative advantage; b Comparative disadvantage (by numer of countries)

11 weakening of their comparative advantages in services However, their RCAs do not show a fundamental shift in the structure of their comparative advantages 6 Conclusion and policy implications This paper examined the competitiveness of developing countries in selected services, based on three indices of revealed comparative advantage for All three indices show that many developing countries have revealed comparative advantages in travel/tourism and transport services About a third of the countries in the sample also show comparative advantages in financial services In spite of the general concern in industrial countries about outsourcing of business services to developing countries, there is no evidence to show that the latter used their locational advantages to increase investment and/or exports in this sector Only a small number of countries such as Argentina, Egypt India, or Turkey show RCAs in business services Consistency tests measured by significance of correlations among RCA indices suggest that, by and large, the three indices employed are consistent as measures of comparative advantage The consistency test of the indices was made by using cardinal, ordinal and nominal measures of comparative advantage RCA explains the level and trend of service export patterns in developing countries Even though there is evidence of some weakening in RCA in the service sectors under study, there does not appear to be a fundamental shift in the structure of their of comparative advantages Services represent 40 percent of exports in many developing countries and are expected to increase to about 70 percent by 2010 (De Souza, 2005) This is partly attributed to technology and trade liberalization in many services As developing countries face erosion in their trade preferences and stiff external competition in traditional sectors such as agriculture or manufacturing, their dependence on services is likely to grow Service exports offer opportunities for suppliers in developing countries Technology allows for cost-effective delivery of business and financial services across borders Outsourcing has gained popularity as corporations in advanced countries strive to reduce fixed overhead by contracting out routine functions These include data processing, electronic publishing, customer call centers, medical records management, hotel reservations, credit card services etc US corporations alone spend over $50 billion a year on information processing (Riddle, 1998) Bilateral/regional agreements have also reduced restrictions on cross border delivery of transport services Many countries have also taken measures to develop a sustainable tourism industry that will contribute to the creation of economic growth and employment (Perrings and Ansuategi, 2000) In order to take advantage of existing opportunities in services, developing countries need to upgrade their infrastructure and technological capability It is, however, difficult to develop competitive services in the absence of roads, railways, electricity or telecommunications (England, 2005) An important ingredient in the development of a vibrant, competitive service sector is the presence of a well developed private sector that works with the government in the development of national infrastructure; foreign direct investment, joint ventures or other forms of strategic alliances with leading service firms in other countries to upgrade existing capabilities and enhance overall competitiveness It is important to promote and target export-oriented investment in services to gain employment, foreign currency and skills, and governments in these countries need to support competitiveness in services Comparative advantage and competitiveness 385

12 JES 34,5 386 by providing a conducive climate for the private sector, and improving infrastructure and skills (Clark, 2000; Perrings and Ansuategi, 2000) References Abu-Akeel, A (1999), Definition of trade in services under the GATS: Legal implications, The George Washington Journal of International Law and Economics, Vol 32 No 2, pp Balance, R, Forstner, H and Murray, T (1987), Consistency tests of alternative measures of comparative advantage, Review of Economics and Statistics, Vol 69, pp Balassa, B (1965), Trade liberalization and revealed comparative advantage, The Manchester School, Vol 33, pp Balassa, B (1977), Revealed comparative advantage revisited, The Manchester School, Vol 45, pp Balassa, B (1989), Comparative Advantage, Trade Policy and Economic Development, Harvestor Wheatsheaf, New York, NY Chanda, R (2003), Social services and the GATS: key issues and concerns, World Development, Vol 31 No 12, pp Clark, P (2000), Public policy and technological change in Africa: aspects of institutions and management capacity, Journal of Economic Studies, Vol 27 Nos 1/2, pp De Souza, P (2005), Raising awareness of services export potential, International Trade Forum, Vol 1, pp 30-1 Dimelis, S and Gatsios, K (1995), Trade with central and Eastern Europe: the case of Greece, in Fiani, R and Portes, R (Eds), EU Trade with Eastern Europe: Adjustment and Opportunities, CEPR, London England, A (2005), Infrastructure failings put more pressure on access to a vital resource, Financial Times, 3 August, p 3 Ferto, I and Hubbard, L (2003), Revealed comparative advantage and the competitiveness in Hungarian Agri-Food sectors, World Economy, Vol 26 No 2, pp Gabrielle, A (2004), Policy Alternatives in Reforming Power Utilities in Developing Countries: A Critical Survey, United Nations, Geneva Gorg, H (2000), Analyzing foreign market entry-the choice between greenfield investments and acquisitions, Journal of Economic Studies, Vol 27 No 3, pp Gual, J and Martin, C (1995), Trade with central and Eastern Europe: the case of Greece, in Fiani, R and Portes, R (Eds), EU trade with Eastern Europe: Adjustment and Opportunities, CEPR, London Heckscher, E (1949), The effect of foreign trade on the distribution of income, in Ellis, H and Metzler, L (Eds), Readings in International Trade, Blakiston Co, Philadelphia, PA Hoekman, B (1996), Assessing the general agreement on trade in services, in Martin, W and Winters, A (Eds), The Uruguay Round and the Developing Economies, Cambridge University Press, Cambridge Hoekman, B and Matoo, A (2000), Services, economic development and the next round of negotiations on services, Journal of International Development, Vol 12 No 2, pp Hoekman, B, Matoo, A and English, P (Eds) (2002), Development, Trade and the WTO, World Bank, Washington, DC International Monetary Fund (IMF) (1998), Balance of Payments Yearbook, International Monetary Fund, Washington DC

13 International Monetary Fund (IMF) (1999), Balance of Payments Yearbook, International Monetary Fund, Washington DC International Monetary Fund (IMF) (2000), Balance of Payments Yearbook, International Monetary Fund, Washington DC International Monetary Fund (IMF) (2001), Balance of Payments Yearbook, International Monetary Fund, Washington DC International Monetary Fund (IMF) (2002), Balance of Payments Yearbook, International Monetary Fund, Washington DC International Monetary Fund (IMF) (2003), Balance of Payments Yearbook, International Monetary Fund, Washington DC International Monetary Fund (IMF) (2004), Balance of Payments Yearbook, International Monetary Fund, Washington DC Javalgi, R and White, S (2002), Strategic challenges for the marketing of services internationally, International Marketing Review, Vol 19 No 6, pp Limao, N and Venables, A (1999), Infrastructure, geographical disadvantage and transport costs, Policy Research Working Paper, World Bank, Washington DC Mahadevan, R (2002), A frontier approach to measuring total factor productivity growth in Singapore s services sector, Journal of Economic Studies, Vol 29 No 1, pp Mildner, S and Werner, W (2005), Progress or stagnation? Services negotiations in the WTO Doha Development round, Intereconomics, Vol 40 No 3, pp Ohlin, B (1933), International and Interregional Trade, Harvard University Press, Boston, MA Perrings, C and Ansuategi, A (2000), Sustainability, growth and development, Journal of Economic Studies, Vol 27 Nos 1/2, pp Petrazzini, B (1996), Competition in telecoms implications for universal service and employment, Public Policy for the Private Sector No 96, World Bank Group, Washington DC Research and Information System for the non-aligned and other developing countries (RIS) (2004), State, FDI and Export of Software and BPO Services from India, United Nations, Geneva Ricardo, D (1981), The Principles of Political Economy and Taxation, Cambridge University Press, Cambridge Riddle, D (1998), Niche markets for service exports, International Trade Forum, Vol 1, pp Shelp, R (1981), Beyond Industrialization: Ascendancy of the Global Service Economy, Praeger, New York, NY Stern, R (2002), Quantifying barriers to trade in services, in Hoekman, B, Matoo, A and English, P (Eds), Development, Trade and the WTO, World Bank, Washington DC Thangavelu, S and Owyong, D (2003), The impact of export growth and scale economies on productivity in Singapore s manufacturing industries, Journal of Economic Studies, Vol 30 No 6, pp United Nations (2004), World Investment Report: The Shift towards Services, United Nations, New York NY Utkulu, U and Seymen, D (2004), Revealed comparative advantage and competitiveness: Evidence for Turkey vis-à-vis the EU 15, paper presented at the European Study Group 6th Annual Conference, Nottingham Vollrath, T (1991), A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage, Weltwirtschaftliches Archiv, Vol 130, pp Comparative advantage and competitiveness 387

14 JES 34,5 388 Wilson, P (2000), The export competitiveness of dynamic Asian economies , Journal of Economic Studies, Vol 27 No 6, pp Winsted, K and Patterson, P (1998), Internationalization of services: the service exporting decision, The Journal of Services Marketing, Vol 12 No 4, p 294 Further reading Chanda, R (2001), Movement of natural persons and the GATS, The World Economy, Vol 24 No 5, pp International Monetary Fund (IMF) (1997), Balance of Payments Yearbook, International Monetary Fund, Washington DC Riddle, D (2000), General Agreement on Trade in Services (GATS): opportunities for developing countries, International Trade Forum, Vol 1, pp About the author Belay Seyoum is associate professor of international business studies at Nova Southeastern University in Florida, USA He earned his Doctorate at McGill University in Canada His research interests are in the areas of trade and technology policy Belay Seyoum can be contacted at: seyoum@huizenganovaedu To purchase reprints of this article please reprints@emeraldinsightcom Or visit our web site for further details: wwwemeraldinsightcom/reprints