Interactions between Cross Border Supply and Commercial Presence: Empirical Analysis on US Bilateral Trade in Service

We argue that there exists complementarity relationship between supply mode of Cross Border Supply and Commercial Presence of trade in service. By using US bilateral service trade data and gravity equation, we try to quantify these effects. In addition, we further classified the data of Commercial Presence (FATS) into horizontal FATS and vertical FATS, and the regression results also validate our assumptions.