Does Service Trade Liberalization Benefit Agriculture and Food Industry?

Service sectors are really important since most of service sectors are used by other sectors (forward linkage). In this reason, the service trade may have huge effects on domestic industries. There has been the scare research between the service trade and domestic industries especially in agricultural and food industry sector since there is scare in data. The purpose of this paper is that figures out the relationship between the service trade and the TFP (Total Factor Productivity) of domestic agri-food industry. Moreover, this paper checks the difference between effect of service trade on the agricultural sector and the food sector since the food sectors has the processed industry characteristics compared to agricultural sector. Using multilevel model and STAN data set in OECD, this paper finds that the service trade has a positive effect on the domestic food industry considering the forward linkage of service sectors on food sectors. According to the result of random effect, the country with higher competitive in food industry has a small coefficient of service linkage on food sector compared to the country with lower competitive in food industry.

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 Record created 2017-04-01, last modified 2020-10-28

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