Producer Services, Manufacturing Linkages, and Trade

By Joseph Francois, J. Woerz. 2008

232 citations recorded by the source corpus.

Working with a mix of panel data on goods and services trade for the OECD for 1994–2004, combined with social accounts data (i.e. data on intermediate linkages) for 78 countries benchmarked to the panel midpoint, we examine the role of services as inputs in manufacturing, with a particular focus on indirect exports of services through merchandise exports, and also on the related interaction between service sector openness and the overall pattern of manufacturing exports. From the cross-section, we also develop a set of stylized facts linking services to the level of development and the density of intermediate linkages. We find significant and strong positive effects from increased business service openness (i.e. greater levels of imports) on industries like machinery, motor vehicles, chemicals and electric equipment, supporting the notion that off-shoring of business services may promote the competitiveness of the most skill and technology intensive industries in the OECD. Conversely, we find evidence of negative general equilibrium effects for sectors that are less service intensive.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/87f13890df64a8b7e7ae32c87aea19042133d4c2

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Citations in the corpus

Cross sectoral FDI spillovers and their impact on manufacturing productivity (2018, background): “Second, services are also direct inputs in the production function (Antonelli, 1999) and determine the productivity of factors of production, thus acting as a strong determinant of the competitiveness, innovation and growth (Guerrieri et al., 2005; Hoekman and Mattoo, 2008; François and Worz, 2008).”
Foreign direct investment in services and manufacturing productivity growth: evidence for Chile (2008, background): “A second shortcoming of measures based on input-output tables is that they provide information for a single year which is particularly restrictive for services usage during our sample period when the linkages between services and manufacturing resulting from processes of outsourcing or splintering i”
Services Trade and Policy (2010, unknown): “10 wedge between goods producing firms and their customers, between savers and investors, and between economic agents relying on communications and transport linkages. For these reasons, the theoretical literature on trade and FDI in services has also emphasized the importance of regulation and comp”
The determinants of regional specialisation in business services: agglomeration economies, vertical linkages and innovation (2015, background): “Aside from the regional literature, several authors have argued that the rise of services, particularly of BS, over the past 30 years is mostly due to changes in the production processes in many sectors and to the ensuing increase in the demand for services as intermediate goods (Francois, 1990; Row”