Services Productivity and Trade Openness: Case of ASEAN

Using fixed effect and Generalised Method of Moments (GMM) estimations, this paper analyses the impacts of trade on the labour productivity of the services sector (at the four key sub-services sector levels: (i) wholesale, retail, and hotel; (ii) transport, storage, and communications; (iii) finance, insurance, and real estate; and (iv) community, social, and personal sectors) for five ASEAN countries--Indonesia, Malaysia, the Philippines, Singapore, and Thailand--from 1990 to 2005. The results show that more exposure to exports will improve labour productivity in the services sector in these countries. Based on input-output relationships, services play an important role as inputs in the manufacturing sector, which is notable in Indonesia, Malaysia, Singapore, and Thailand.

ERIA-DP-2015-56