Determinants of the Export of Financial and Insurance & Pension Services

Abstract

International trade in services, defined as the backbone of the global economy, is expected to take approximately 50% by 2040 globally. Among services, two service categories are financial and insurance & pension services. Considering the contribution of the exports of these services to the local and global economy and the increasing trend of their export values, this study aims to examine the main determinants of the export of financial and, insurance & pension services. Therefore, it analyses the impacts of changes in Foreign Direct Investment Inflows and Outflows, Financial Institutions Depth, Corruption Perception Index, Gross Domestic Product, and Federal Funds Rate on the export of financial and insurance & pension services. The Panel Fixed Effect Model is applied using annual panel data from 2005 through 2018 for 82 high and middle-income countries. Empirical findings show that Financial Institutions Depth and Gross Domestic Product have positive effects on the export of financial and insurance & pension services in high-income countries, while for middle-income countries, Financial Institutions Depth, Gross Domestic Product, and Foreign Direct Investment Outflow variables promote the export of financial and insurance & pension services.