What are the determinants of international trade in services? Evidence from firm-level data for Poland

In this paper, we investigate the determinants of firm-level services export performance. Our focus is on three main aspects affecting services export: international capital linkages (FDI relationships), the existence of trade barriers, the demand and supply factors. The estimated models of the export performance include product and firm-level controls, such as foreign demand, firm-level imports, merchandise exporter status and foreign ownership, as well as destination fixed effects, product fixed effects, firm-level fixed effects. We used the Services Trade Restrictiveness Index (STRI) as a proxy to control for institutional trading barriers. The results suggest export-augmenting effects in services caused by both foreign ownership and involvement in merchandise trade. Restrictions on international services market turned out to be significant as well. As far as the heterogeneity of firms is concerned, size of firms, industry and gravity variables such as GDP of trade-partner, distance and common border have a significant impact on export. The study uses a unique firm-level dataset providing detailed information on services exports for 2010-2015. In contrast to modern studies based on a random sample of firms, we used the entire population of services exporters in Poland.(original abstract)