Services content of Japanese trade

This paper investigates the scale of direct and indirect services trade, or services content, in Japanese trade between 1985 and 1995 using data from Japanese input-output tables. The empirical analysis revealed that the services content reflected the characteristics of the Japanese economy. The scale of research and development (R&D) services in total services trade has been much higher throughout the period than has the scale of other services. The R&D services content of Japanese merchandise exports amounted to US$ 27.0 billion in 1995, 84.3 percent of which was channeled through machinery exports. The R&D services content of Japanese machinery exports toward East and Southeast Asia grew rapidly, especially toward ASEAN countries. Our results confirm the importance of the traded-related international R&D spillovers.