Trade and Foreign direct investment in services: A review

Services sector has emerged as the largest and fastest-growing sector in the world economy in the last two decades, providing more than 60 per cent of global output and, in many countries, an even larger share of employment. Not only has the services sector grown in terms of its share in global output and employment, its share in total trade has
also grown rapidly in this period. Along with this, we find that global FDI is also shifting away from manufacturing towards services sector. The growing importance of services sector and the corresponding rise in its role in integrating the world economy has led to a stream of literature that examines different aspects of trade and FDI in services. However, very few studies have focussed on the conceptual issues with respect to trade and FDI in services.