{"id":437526,"date":"2025-11-13T10:14:08","date_gmt":"2025-11-13T09:14:08","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/437526\/"},"modified":"2025-11-13T10:14:08","modified_gmt":"2025-11-13T09:14:08","slug":"the-eu-services-directive-untapped-potentials-of-trade-in-services-2","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/437526\/","title":{"rendered":"The EU Services Directive: Untapped Potentials of Trade in Services"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-437526","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"A major step towards liberalizing the EU Internal Market for services was taken in 2006 with the EU Services Directive. This study quantifies its impact on EU trade in services and real income and identifies untapped potential due to remaining administrative barriers and weak enforcement of Single Market rules. Results are based on a structural gravity model estimated at the level of industry and country-pairs over the period 1995 to 2018. A novel country-specific indicator derived from business complaints to the EU-SOLVIT mechanism, assesses the quality of service sector reforms and remaining barriers to trade in services. Empirical estimates show heterogeneous effects across industries, with strong positive effects in publishing, IT and business services, but negative effects for some industries such as in wholesale and retail trade. On average, the Services Directive increased intra-EU trade in services by 4.4 percent, but had negligible effects on real income. If reform efforts were to match those of the strongest reformers, intra-EU export potential could increase by 6.2 percent and potential real income by 0.3 percent on average.","onlinedate":"2025-11-13 09:14:09","lang":"English","publication_series":"","publication_date":"20251111","publication_date_year":"","publication_date_full":true,"publication_num_pages":"37","keywords":"[\"Trade in services\",\"European Integration\",\"Gravity model\",\"Trade liberalisation\"]","jelcodes":"[\"F15\",\"C23\",\"C50\",\"L80\"]","related_publications":"[]","pdf":437528,"zip":null,"link":"","monthly_report":true,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"715","journal":"WIFO Working Papers","publisher":"","invisible":false,"external":false,"embargo_date":null,"types":[44410],"research_groups":[3491],"collaboration":"","persons":[3785,3907],"persons_data":"[{\"personId\":3785,\"personName\":\"Michael Pfaffermayr\",\"organisationNames\":[]},{\"personId\":3907,\"personName\":\"Yvonne  Wolfmayr\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_contributiontoperiodical rendering_apa rendering_contributiontoperiodical_apa\\\"><span>Pfaffermayr, M.<\\\/span><span>, &amp; Wolfmayr, Y.<\\\/span> (2025). <span>The EU Services Directive: Untapped Potentials of Trade in Services<\\\/span>. <span><em>WIFO Working Papers<\\\/em><\\\/span>, (715).<\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_contributiontoperiodical rendering_vancouver rendering_contributiontoperiodical_vancouver\\\"><span>Pfaffermayr M<\\\/span><span>, Wolfmayr Y<\\\/span>. <span class=\\\"title\\\"><span>The EU Services Directive: Untapped Potentials of Trade in Services<\\\/span><\\\/span>. <span>WIFO Working Papers<\\\/span>. 2025 Nov 11;(715).<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_contributiontoperiodical rendering_bibtex rendering_contributiontoperiodical_bibtex\\\"><div>@misc{0c7f174d7d3e4202aefa44a3935f9ff5,<\\\/div><div>  title    = \\\"The EU Services Directive: Untapped Potentials of Trade in Services\\\",<\\\/div><div>  abstract = \\\"A major step towards liberalizing the EU Internal Market for services was taken in 2006 with the EU Services Directive. This study quantifies its impact on EU trade in services and real income and identifies untapped potential due to remaining administrative barriers and weak enforcement of Single Market rules. Results are based on a structural gravity model estimated at the level of industry and country-pairs over the period 1995 to 2018. A novel country-specific indicator derived from business complaints to the EU-SOLVIT mechanism, assesses the quality of service sector reforms and remaining barriers to trade in services. Empirical estimates show heterogeneous effects across industries, with strong positive effects in publishing, IT and business services, but negative effects for some industries such as in wholesale and retail trade. On average, the Services Directive increased intra-EU trade in services by 4.4 percent, but had negligible effects on real income. If reform efforts were to match those of the strongest reformers, intra-EU export potential could increase by 6.2 percent and potential real income by 0.3 percent on average.\\\",<\\\/div><div>  keywords = \\\"Trade in services, European Integration, Gravity model, Trade liberalisation\\\",<\\\/div><div>  author   = \\\"Michael Pfaffermayr and Yvonne Wolfmayr\\\",<\\\/div><div>  year     = \\\"2025\\\",<\\\/div><div>  month    = nov,<\\\/div><div>  day      = \\\"11\\\",<\\\/div><div>  language = \\\"English\\\",<\\\/div><div>  journal  = \\\"WIFO Working Papers\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_contributiontoperiodical rendering_ris rendering_contributiontoperiodical_ris\\\"><p>TY  - GEN<\\\/p><p>T1  - The EU Services Directive: Untapped Potentials of Trade in Services<\\\/p><p>AU  - Pfaffermayr, Michael<\\\/p><p>AU  - Wolfmayr, Yvonne <\\\/p><p>PY  - 2025\\\/11\\\/11<\\\/p><p>Y1  - 2025\\\/11\\\/11<\\\/p><p>N2  - A major step towards liberalizing the EU Internal Market for services was taken in 2006 with the EU Services Directive. This study quantifies its impact on EU trade in services and real income and identifies untapped potential due to remaining administrative barriers and weak enforcement of Single Market rules. Results are based on a structural gravity model estimated at the level of industry and country-pairs over the period 1995 to 2018. A novel country-specific indicator derived from business complaints to the EU-SOLVIT mechanism, assesses the quality of service sector reforms and remaining barriers to trade in services. Empirical estimates show heterogeneous effects across industries, with strong positive effects in publishing, IT and business services, but negative effects for some industries such as in wholesale and retail trade. On average, the Services Directive increased intra-EU trade in services by 4.4 percent, but had negligible effects on real income. If reform efforts were to match those of the strongest reformers, intra-EU export potential could increase by 6.2 percent and potential real income by 0.3 percent on average.<\\\/p><p>AB  - A major step towards liberalizing the EU Internal Market for services was taken in 2006 with the EU Services Directive. This study quantifies its impact on EU trade in services and real income and identifies untapped potential due to remaining administrative barriers and weak enforcement of Single Market rules. Results are based on a structural gravity model estimated at the level of industry and country-pairs over the period 1995 to 2018. A novel country-specific indicator derived from business complaints to the EU-SOLVIT mechanism, assesses the quality of service sector reforms and remaining barriers to trade in services. Empirical estimates show heterogeneous effects across industries, with strong positive effects in publishing, IT and business services, but negative effects for some industries such as in wholesale and retail trade. On average, the Services Directive increased intra-EU trade in services by 4.4 percent, but had negligible effects on real income. If reform efforts were to match those of the strongest reformers, intra-EU export potential could increase by 6.2 percent and potential real income by 0.3 percent on average.<\\\/p><p>KW  - Trade in services<\\\/p><p>KW  - European Integration<\\\/p><p>KW  - Gravity model<\\\/p><p>KW  - Trade liberalisation<\\\/p><p>M3  - WIFO series<\\\/p><p>JO  - WIFO Working Papers<\\\/p><p>JF  - WIFO Working Papers<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.3 (Yoast SEO v28.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The EU Services Directive: Untapped Potentials of Trade in Services - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/437526\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The EU Services Directive: Untapped Potentials of Trade in Services\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wifo.ac.at\/en\/publication\/437526\/\" \/>\n<meta property=\"og:site_name\" content=\"WIFO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/WIFOat\/\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@WIFOat\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/437526\\\/\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/437526\\\/\",\"name\":\"The EU Services Directive: Untapped Potentials of Trade in Services - 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