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Exports of Knowledge-Intensive Business Services: Domestic Market Hypotheses and Interactions with Industrial Capabilities

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  • Lorenzo Cassini

    (Interdisciplinary School of Higher Social Studies (IDAES-UNSAM), National Council for Scientific and Technical Research (CONICET))

Abstract

The recent transformation of the service sector and the deindustrialization of most economies has increased support for an export-led development strategy of knowledge-intensive services (KIBS), bypassing the industrialization stage. However, the literature on deindustrialization suggests that early countries tend to develop non-dynamic services because KIBS are born out of demand for complex solutions by local industrial companies. The article theoretically examines this hypothesis from structuralist, evolutionist and Schumpeterian arguments. In addition, using macro-panel models with fixed effects, it estimates the relationship between domestic demand and the export capacity of KIBS. He finds that domestic demand is a relevant mechanism for building export capacities in KIBS, but it is only effective in countries that have reached advanced industrialization.

Suggested Citation

  • Lorenzo Cassini, 2023. "Exports of Knowledge-Intensive Business Services: Domestic Market Hypotheses and Interactions with Industrial Capabilities," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(81), pages 55-80, May.
    • Handle: RePEc:bcr:ensayo:v:1:y:2023:i:81:p:55-80
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    References listed on IDEAS

    as
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    3. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    4. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    5. Primi, Annalisa & Peres Núñez, Wilson, 2009. "Theory and practice of industrial policy: evidence from the Latin American experience," Desarrollo Productivo 4582, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2007. "International offshoring of services: A parity study," Journal of International Management, Elsevier, vol. 13(1), pages 7-21, March.
    7. Tregenna, Fiona, 2015. "Deindustrialisation, structural change and sustainable economic growth," MERIT Working Papers 2015-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    domestic market hypothesis; knowledge-intensive business services; premature deindustrialization;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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