Business services outsourcing and economic growth: Evidence from a dynamic panel data approach Volume 6 Jena Economic Research Papers 2012-09-03 2012 2007 2012-049 international trade business services growth system GMM Innovations in information- and telecommunication technology render the proximity requirement between business partners obsolete and make business service outsourcing via cross-border trade more feasible. Although the (service-led) growth prospects have been widely discussed, evidence at the country level is scarce. In this paper, we evaluate the effect of openness to trade commercial- and specialized business services on long-run growth by applying a dynamic panel data approach to account for unobserved country specific effects and endogenous growth determinants. The system GMM estimates validate that a long-run growth effect for countries taking part in the outsourcing process of producer services exists. The growth effect is significantly stronger in a sample of Non-OECD countries and suggests a kind of catching-up process. Evidence from two stage least square indicate that the impact of professional service regulation on long-run growth work rather indirectly through trade flows. jportal_jpjournal_00000016 2012-09-03T11:20:18.545Z 2012-09-03T11:19:53.065Z