IDEAS home Printed from https://ideas.repec.org/a/ksp/journ5/v2y2015i4p334-349.html
   My bibliography  Save this article

The role of Services in Enhancing Indian Manufacturing Exports: A Firm Level Analysis, 2000-01 to 2011-12

Author

Listed:
  • Sonia MUKHERJEE

    (Jawaharlal Nehru University, India.)

Abstract

In this paper, we try to examine and assess the contribution of services towards India’s manufacturing exports at the firm level. In other words, the role of services in shaping the international competiveness of the Indian Manufacturing Sector at the firm level is examined. Services are instrumental in connecting to the world market and can help firms to differentiate their products. However, only bits and pieces of the relation between services and exports have been analyzed in the earlier literature. Most of the earlier studies relating to services have explored the link between services and Total Factor Productivity. The relation between services and exports has not been explored at the firm level in case of India. This also gives a justification for conducting the present study. With now firm level databases available, it allows us to explore this part in details. For exploring this link, the firm level data was collected from the Centre for Monitoring of The Indian Economy (Prowess Database) for the years 2000-01 to 2011-12. The Manufacturing firms had used different types of services according to their needs and the expenditure for the all the different services were not the same. The expenses incurred by the manufacturing firms for services like business services, repairs and maintenance, Professional services, Research & Development and others etc. were added together to get total expenses on the services variable. Two alternative econometric methods (Panel Regression method and Tobit model) were used in our study. The findings confirm that services have contributed to enhanced export competitiveness of the Indian manufacturing firms. The paper looks at the firm specific factors like firm size, age, previous years export performance, group versus non-group, labor productivity and services that affected the export performance of the Indian manufacturing firms. The overall results show that the firm specific factors such as firm size, extent of use of services, group versus non-group firms, and previous years export performance played a positive role in improving the Indian manufacturing exports.

Suggested Citation

  • Sonia MUKHERJEE, 2015. "The role of Services in Enhancing Indian Manufacturing Exports: A Firm Level Analysis, 2000-01 to 2011-12," Journal of Economics Library, KSP Journals, vol. 2(4), pages 334-349, December.
    • Handle: RePEc:ksp:journ5:v:2:y:2015:i:4:p:334-349
    as

    Download full text from publisher

    File URL: http://www.kspjournals.org/index.php/JEL/article/download/559/603
    Download Restriction: no
    File URL: http://www.kspjournals.org/index.php/JEL/article/view/559
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 609-644.
    2. Magnus Lodefalk, 2013. "Servicification of manufacturing - evidence from Sweden," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 6(1), pages 87-113.
    3. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    4. Joseph Francois & Julia Woerz, 2008. "Producer Services, Manufacturing Linkages, and Trade," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 199-229, December.
    5. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. repec:hal:wpspec:info:hdl:2441/10148 is not listed on IDEAS
    8. M. Landesmann & M. Pfaffermayr, 1997. "Technological competition and trade performance," Applied Economics, Taylor & Francis Journals, vol. 29(2), pages 179-196.
    9. Cassiman, Bruno & Golovko, Elena & Martínez-Ros, Ester, 2010. "Innovation, exports and productivity," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 372-376, July.
    10. repec:hal:spmain:info:hdl:2441/10148 is not listed on IDEAS
    11. Kiyohiko Ito & Vladimir Pucik, 1993. "Abstract," Strategic Management Journal, Wiley Blackwell, vol. 14(1), pages 61-75, January.
    12. repec:spo:wpecon:info:hdl:2441/10148 is not listed on IDEAS
    13. repec:spo:wpmain:info:hdl:2441/10148 is not listed on IDEAS
    14. Markus Kelle & Jörn Kleinert, 2010. "German Firms in Service Trade," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(1), pages 51-72.
    15. Windrum, Paul & Tomlinson, Mark, 1999. "Knowledge-intensive services and international competitiveness: a four country comparison," Research Memorandum 023, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    16. Joseph Francois & Julia Woerz, 2007. "Producer Services, Manufacturing Linkages, and Trade," FIW Working Paper series 002, FIW.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sonia Pant & Debashis Chakraborty, 2024. "Can Servicification Benefit Manufacturing Exports? Empirical Results for India," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 25(2), pages 126-157, September.
    2. Bishwanath Goldar, 2023. "ICT Investment, Adoption of ISO 14000 Certification, and Export Performance in Indian Manufacturing Plants," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(3), pages 523-553, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sonia Mukherjee, "undated". "The Role of Services in Enhancing Indian Manufacturing Exports: A Firm Level Analysis, 2000-01 to 2011-12," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 15-08, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    2. Magnus Lodefalk, 2014. "The role of services for manufacturing firm exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 59-82, February.
    3. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    4. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    5. Yvonne Wolfmayr, 2008. "Producer Services and Competitiveness of Manufacturing Exports," WIFO Studies, WIFO, number 34225.
    6. Omar Bamieh & Francesco Bripi & Matteo Fiorini, 2022. "Services trade and labor market outcomes: Evidence from Italian firms," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 673-701, August.
    7. Markus Kelle, 2013. "Crossing Industry Borders: German Manufacturers as Services Exporters," The World Economy, Wiley Blackwell, vol. 36(12), pages 1494-1515, December.
    8. Ariu, Andrea & Mayneris, Florian & Parenti, Mathieu, 2020. "One way to the top: How services boost the demand for goods," Journal of International Economics, Elsevier, vol. 123(C).
    9. Elisabeth Christen & Joseph Francois, 2017. "Modes of Supply for US Exports of Services," The World Economy, Wiley Blackwell, vol. 40(3), pages 517-531, March.
    10. Aleksandra Kordalska & Magdalena Olczyk, 2018. "CEE Trade in Services: Value-Added Versus Gross Terms Approaches," Eastern European Economics, Taylor & Francis Journals, vol. 56(4), pages 269-291, July.
    11. Markus Kelle, 2012. "Crossing Industrial Borders: German Manufacturers as Services Exporters," Development Working Papers 329, Centro Studi Luca d'Agliano, University of Milano, revised 27 Mar 2012.
    12. Ketan Reddy & Subash Sasidharan & Shandre Thangavelu, 2023. "Does servicification of manufacturing increase the GVC activities of firms? Case of India," The World Economy, Wiley Blackwell, vol. 46(1), pages 153-181, January.
    13. Movahedi, Mohammad, 2013. "Le commerce international, l’adoption de l’innovation et le choix de l’entrée-sortie à l’exportation des firmes [International trade, innovation adoption and export entry-exit choice of the firms]," MPRA Paper 44268, University Library of Munich, Germany, revised 01 Jan 2014.
    14. repec:wsr:ecbook:2008:i:i-009 is not listed on IDEAS
    15. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
    16. Maria Bas, 2013. "Does Services Liberalization Affect Manufacturing Firms' Export Performance? Evidence from India," Working Papers 2013-17, CEPII research center.
    17. Johannes Schwarzer, 2017. "The Effects of Exporting on Labour Productivity: Evidence from German Firms," Working Papers 1702, Council on Economic Policies.
    18. Bas, Maria, 2014. "Does services liberalization affect manufacturing firms’ export performance? Evidence from India," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 569-589.
    19. Chen, Natalie & Juvenal, Luciana, 2022. "Markups, quality, and trade costs," Journal of International Economics, Elsevier, vol. 137(C).
    20. Charlotte Emlinger & Viola Lamani, 2020. "International trade, quality sorting and trade costs: the case of Cognac," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 579-609, August.
    21. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.

    More about this item

    Keywords

    Services; Exports; Manufacturing; Firms.;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
    • L69 - Industrial Organization - - Industry Studies: Manufacturing - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ksp:journ5:v:2:y:2015:i:4:p:334-349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bilal KARGI The email address of this maintainer does not seem to be valid anymore. Please ask Bilal KARGI to update the entry or send us the correct address (email available below). General contact details of provider: http://www.kspjournals.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.