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Linking Services to Manufacturing Exports

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Abstract

In this paper we analyse the interplay between services and manufacturing. This is done through identifying and quantifying a direct link between manufacturing exports and the sales by service providers. For identification of this transmittance mechanism, with the help of highly detailed geographic data, we create a Localised Export Exposure (LEE) variable that captures the variation in demand for service inputs based on nearby exporters. Since service firms are much less geographically specialised than manufacturing firms, we observe a high variation in their exposure to demand changes. This spatial variation in the demand for service inputs results from a variation in local export volumes (LEE); which is used to assess the interplay between manufacturing exports and services. Our results show that a 1% increase in exports increases the volume of sales of service firms by 0.2% (and employment within the firm by 0.06%). The results show also that the link is highly local and the strongest impact is within 20 km of the shock.

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  • Arnarson, Björn Thor & Gullstrand, Joakim, 2016. "Linking Services to Manufacturing Exports," Working Papers 2016:27, Lund University, Department of Economics, revised 24 Feb 2017.
    • Handle: RePEc:hhs:lunewp:2016_027
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    Cited by:

    1. Joakim Gullstrand, 2020. "What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis," The World Economy, Wiley Blackwell, vol. 43(9), pages 2315-2342, September.
    2. El-Sahli, Zouheir & Gullstrand, Joakim & Olofsdotter, Karin, 2017. "The Internal and External Effects of Offshoring on Job Security," Working Papers 2017:14, Lund University, Department of Economics.

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    More about this item

    Keywords

    Spillovers; Services; Manufacturing Exports; Input-output linkages;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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