Abstract: By extending the Grossman-Rossi-Hansberg model, this paper identifies the mechanism of technical innovation affecting the correlation of service trade and the growth of service sector. Main findings are as follows (1) Service outsourcing is promoted by technical innovation statically and the development of different forms of outsourcing depends on the comparative development of separation techniques. (2) Dynamically speaking, the extent of influence depends on market openness, development of service sector and technical concentration of service sector. (3) The mechanism of communication technology and R&D investment promoting the correlation index is through the increase of total factor productivity. Empirical evidence was discovered in the empirical analysis to support the above conclusion. Finally, the suggestions to promote the upgrading of service trade and industry structure are proposed accordingly.
Keywords: Technical Innovation, Service Trade Spillover, Service Outsourcing
source:Finance & Trade Economics ,No2,2014