Trade in services : IT and task content

In this paper we investigate the determinants of the dramatic increase in services tradability focusing on the extensive margin of the phenomenon. We use balance sheet and firm-level service trade information over the period 1995-2005 provided by the National Bank of Belgium and we merge it with information on the evolution of information technology use and tasks performed by workers from the qualification and career survey provided by the BIBB-IAB. We show that technological change, measured either by the more intensive use of information technologies or by changes in the task content of jobs, has substantially contributed to the increase in the number of service-trading firms. Interestingly, we find evidence of a churning effect. While technological change has induced net entry into service trading, it has also increased the likelihood of both gross entry and exit of firms. Furthermore, our evidence suggests that due to the peculiar nature of services provision, the change in the tasks content of jobs is a better measure of technological change than the use of information technologies. Our results are robust to controlling for service trade liberalization and offshoring.trade in services; extensive margin; technological change; task content

Service Trade and Occupational Tasks: An Empirical Investigation

Using micro data for Belgium we investigate the relationship between occupational tasks changes and the rise of service trade. We focus the analysis on the extensive margin and look at the heterogeneous proliferation of firms involved in exports and imports of services across sectors characterized by different tasks changes patterns. Occupational tasks changes display an extremely consistent relationship with participation to service trade across firm groups pointing to strong churning effects. The change in analytical (interactive and routine cognitive) tasks intensity has a positive (negative) impact across the board meaning that, in industries characterized by larger changes, firms have experienced both higher (lower) likelihood of entry and exit. The negative relationship between the change in interactive tasks and service exports participation underlines the special role that proximity between demand and supply plays for services. Interestingly, we find exactly the opposite result (a positive relationship) between the extensive margin of goods exports and interactive tasks. Moreover, our analysis suggests that the change in IT use per se does not strike as being a key underlying force behind the increase in the extensive margin of service exports.Trade in services, extensive margin, occupational tasks, technological change

Crisis-proof services: Why trade in services did not suffer during the 2008-2009 collapse. National Bank of Belgium Working Paper No. 284

During the 2008-2009 crisis, trade in goods fell by almost 30%. In contrast, trade in business, telecommunication and financial services continued growing at their pre-crisis rates and only services related to transport declined. Using trade data at the firm-product-destination level for Belgium, I show that during the crisis the elasticity of services exports with respect to GDP growth in destination countries was significantly different from that of goods exports. In particular, the negative income shock in partner countries affected exports of goods but not exports of services. This difference is economically sizable: if goods exports had had the same elasticity to GDP growth as services exports, their fall during the 2008-2009 collapse would have been only half what was observed

One way to the top: How services boost the demand for goods. National Bank of Belgium Working Paper No. 340

In this paper, we take advantage of a uniquely detailed dataset on firm-level exports of both goods and services to show that demand complementarities between services and goods enable firms to boost their manufacturing exports by also providing services. The positive causal effect of services accounts for up to 25% of the manufacturing exports of bi-exporters (i.e. the firms that export both goods and services), and 12% of overall goods exports from Belgium. We find that by associating services with their goods, bi-exporters increase both the quantities and the prices of their goods. To rationalize these findings, we develop a new model of oligopolistic competition featuring one-way complementarity between goods and services, product differentiation, and love for variety. By supplying services with their goods, firms increase their market share, and hence their market power and markup. The model then shows that exporting services acts as a demand shifter for firms, increasing the perceived quality of their products. Going back to the data, we find strong confirmation for this mechanism

The interconnections between services and goods trade at the firm-level

In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms for the period 1995–2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) joint imports are associated with higher firm productivity; iii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to guide our econometric strategy. We use our results to quantify the impact of reductions in goods and services barriers between the US and the EU. Our findings have important implications for the design of trade policy. They suggest that a liberalization of services trade can have direct and sizable effects on goods trade, and vice versa. Moreover, liberalizing goods and services trade jointly brings substantial complementarities

The interconnections between services and goods trade at the firm-Level

In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms during the period 1995-2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to design our econometric strategy and use the estimated model for counterfactual analysis. In particular, we look at the quantitative impact of reductions in goods and services barriers between the US and the EU. Our findings have important implications for the design of trade policy. They suggest that a liberalization of service trade can have quite direct and sizable effects on goods trade and vice-versa, and that jointly liberalizing goods and services trade brings about substantial complementaritie

The interconnections between services and goods trade at the firm-level. National Bank of Belgium Working Paper No. 329

In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms during the period 1995-2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to design our econometric strategy. The results suggest that a liberalization of service trade has direct and sizable effects on goods trade and vice-versa. Moreover, sourcing goods and services from the same origin brings substantial complementarities to both

Firm heterogeneity and aggregate business services exports : micro evidence from Belgium, France, Germany and Spain

En este trabajo se emplean microdatos de exportaciones de servicios desagregados por empresa-destino-tipo de servicio con la finalidad de analizar cómo afectan las características de las empresas a las exportaciones agregadas de servicios en Bélgica, Francia, Alemania y España para el período 2003-2007. El nivel y el crecimiento de las exportaciones agregadas se descomponen en diferentes márgenes, prestando una atención especial a la heterogeneidad empresarial dentro de cada país. Los resultados corroboran que el débil crecimiento de las exportaciones en Francia refleja, al menos parcialmente, el débil dinamismo de los pequeños exportadores. En contraste, este grupo de empresas es el más dinámico en el resto de los países de la muestra. Nuestros resultados subrayan la relevancia de la heterogeneidad empresarial para explicar la evolución de las exportaciones agregadasThis paper uses detailed micro data on service exports at the firm-destination-service level to analyse the role of firm heterogeneity in shaping aggregate service exports in Belgium, France, Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate service exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growt

Adversarial ModSecurity: Countering Adversarial SQL Injections with Robust Machine Learning

ModSecurity is widely recognized as the standard open-source Web Application Firewall (WAF), maintained by the OWASP Foundation. It detects malicious requests by matching them against the Core Rule Set, identifying well-known attack patterns. Each rule in the CRS is manually assigned a weight, based on the severity of the corresponding attack, and a request is detected as malicious if the sum of the weights of the firing rules exceeds a given threshold. In this work, we show that this simple strategy is largely ineffective for detecting SQL injection (SQLi) attacks, as it tends to block many legitimate requests, while also being vulnerable to adversarial SQLi attacks, i.e., attacks intentionally manipulated to evade detection. To overcome these issues, we design a robust machine learning model, named AdvModSec, which uses the CRS rules as input features, and it is trained to detect adversarial SQLi attacks. Our experiments show that AdvModSec, being trained on the traffic directed towards the protected web services, achieves a better trade-off between detection and false positive rates, improving the detection rate of the vanilla version of ModSecurity with CRS by 21%. Moreover, our approach is able to improve its adversarial robustness against adversarial SQLi attacks by 42%, thereby taking a step forward towards building more robust and trustworthy WAFs