Service Market Liberalization Research Proposal

Service Market Liberalization - Research Proposal Example The proposal was rejected in March 2005 and caused a major setback for the SMP process. A possible reason for rejection was the coincidence of the proposal with the accession of ten new member states giving rise to labor immigration fears. In 2006, an amended version of the Services Directive was agreed upon to be implemented in 2010 (EC 2006). In the 1990s labor growth in the European services sector decreased in comparison with the 1980s and the United states of America (USA) (European Central Bank 2006). One reason to the decrease in growth is the slow implementation of Information Communication Technology (ICT) services as pointed out by O'Mahony et al. (2003). Bilateral trade and foreign investment in services in an open market would stimulate competition and foster innovation which would diminish the gap with the US. Liberalization of services is still considered by many as a zero-sum-game where some countries win while others lose. The notion of liberalization of services gives rise to fears from open market competition and survival of local services. This research focuses on the effect of service market liberalization and the expected increase in market competition on the economies of the lesser developed European countries in Central and Eastern Europe. The better understanding of the effect of liberalization of services on the lesser developed countries in Central... The question is whether an open market for services in Europe would increase competition and productivity in the central and eastern European countries. 2. Research Problem 2.1 Research Problem Description Liberalization of services is still considered by many as a zero-sum-game where some countries win while others lose. The notion of liberalization of services gives rise to fears from open market competition and survival of local services. This research focuses on the effect of service market liberalization and the expected increase in market competition on the economies of the lesser developed European countries in Central and Eastern Europe. 2.2 Significance and Contribution of the Research Problem The better understanding of the effect of liberalization of services on the lesser developed countries in Central and Eastern Europe would convince politicians towards legislation of required directives to disrupt barriers to trade of services and create an open service market. 2.3 Delimitation and Assumptions of the Problem Research is limited to the effect of liberalization of services in Central and Eastern European countries only. Only the economies of these countries are evaluated towards their reaction to services liberalization. Liberalization of other trade products is not considered. 2.4 Research Objective This research aims at achieving the following research objectives: To conduct an in-depth investigation and analysis of the currently available studies and theories that predict and estimate the effect of services liberalization in developed and less developed economies. Examine the statistical data of Central and Eastern Countries of trade in services and their relationship to different acts of