The Content of Knowledge-Intensive Business Services in International Trade: Evidence from European Union Countries

In this paper, we propose four measures to calculate the KIBS intensity of trade (i.e., KIBS terms of trade; an importance indicator; an indicator showing the relative KIBS intensity of exports; and an indicator showing the relative importance of KIBS). Finally, we examine the composition of KIBS output imputed to export. The study refers to the EU countries. Calculations are based on a set of input-output tables from the World Input-Output Database for the period 2000 – 2014. Empirical results demonstrate that the EU-15 has a clear and growing advantage over the EU-13 in KIBS direct exports, but when taking into account indirect KIBS trade, the EU-15’s advantage is smaller, with a decreasing trend. Export appeared to be more KIBS-intensive than production for domestic final demand, and computer and information services were the main engine behind the growing KIBS intensity of export. Among the EU countries, Ireland is an outlier.