How Much Does Gravity Deflect Services Trade?

Simple measures show that there is proportionally less international trade in services than in goods, and survey evidence suggests that border barriers are important. But much service production is extremely localized within countries, reducing international trade independently of border barriers and thus befogging attempts to see the size of border barriers. The fog is pushed back in this paper by measuring the e ects of gravity on the services trade of Canada's provinces from 1997 to 2007... more »