Abstract: Based on the background of tertiarization and service globalization, this paper analyzes the determinants of 40 economies′ service trade costs from 1995 to 2011 from the aspects of generality and personality factors of service trade costs——space distance, language barriers, time zone differences, service restriction and service trade agreement. Research results show that geographic distance, time zone differences and service restriction can promote service trade costs while the existence of shared borders, common language and regional service trade agreement would play an inhibiting role; on the impact trends, the influence of geographic distance and time zone differences gradually decreases while service restriction and regional service trade agreement gradually increases. Therefore, on the way to reduce service trade costs to expand service trade scale, all countries need to take corresponding measure for the above dimensionss, especially should pay attention to influence factors that have obvious service characteristics, such as service lag, service restriction and regional service trade agreement.

Key words: service trade costs, determinants, panel data, Hausman-Taylor Estimation Method