The Impact of Exporting Modern Services on Economic Development:

Technology has made it possible to export many services in a similar manner to goods. The focus in this thesis is on modern services, therefore traditional service exports like travel and tourist services, are not included. Examples of modern services that can be exported are financial, IT and communication services. The export of these modern services has grown drastically in the past 25 years. Developing countries are also supplying these services internationally, a well-known example being India’s IT sector. In this thesis a panel study using data from the World Data Bank on 214 countries is performed. The fixed effects model is used to see if and how the value of modern service exports influences GDP per capita growth, controlling for other determinants of economic growth. The results show that there is a significant positive effect of modern services exports on GDP per capita growth.