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The deindustrialisation/tertiarisation hypothesis reconsidered: a subsystem application to the OECD7

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  • Sandro Montresor
  • Giuseppe Vittucci Marzetti

Abstract

The diffusion of outsourcing and vertical foreign direct investment (FDI) among manufacturing firms, along with the vertical integration of market services into manufacturing, is questioning the so called 'Deindustrialisation/Tertiarisation' (DT) hypothesis. In particular, it has been argued that DT might be an 'apparent' phenomenon, in fact amounting to a simple reorganisation of production across national and sectoral boundaries. The empirical studies that try to support this hypothesis, however, cannot be deemed conclusive as they suffer two methodological drawbacks: a non-(sub-)systemic sectoral level of analysis and a not truly global empirical approach. In order to overcome these drawbacks, the paper carries out an investigation of the actual extent to which DT occurred in the OECD area over the 1980s and the 1990s with two modifications: a sector instead of a subsystem perspective, retaining both direct and indirect relations and a 'pseudo-world' of seven OECD countries, thus taking into account the 'global' dimension of the phenomenon. Our results strongly support the DT hypothesis: although the weight of market services in the manufacturing subsystem increases, providing a counterbalance to manufacturing decline, subsystem shares significantly decrease, thus confirming DT as a more fundamental trend of the investigated period. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Sandro Montresor & Giuseppe Vittucci Marzetti, 2011. "The deindustrialisation/tertiarisation hypothesis reconsidered: a subsystem application to the OECD7," Cambridge Journal of Economics, Oxford University Press, vol. 35(2), pages 401-421.
  • Handle: RePEc:oup:cambje:v:35:y:2011:i:2:p:401-421
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    Cited by:

    1. Richard Kalis & Erika Stracova, 2017. "Input-Output Analysis of Deindustrialization and Outsourcing," Department of Economic Policy Working Paper Series 011, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    2. Heike Belitz, 2015. "Die Internationalisierung deutscher Industrieunternehmen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 84(1), pages 103-120.
    3. S. Montresor & Vittucci & G. Marzetti, 2008. "Constructing intersectoral innovation diffusion networks with input-output: how to get relative flows? An illustrative application to six OECD technological systems for the middle '90s," Working Papers 649, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. repec:ebl:ecbull:eb-17-00477 is not listed on IDEAS
    5. Massimiliano Mazzanti & Davide Antonioli & Francesco Nicolli & Marianna Gilli, 2013. "Information Technology, Environmental Innovations and Complementarity Strategies," Working Papers 2013132, University of Ferrara, Department of Economics.
    6. Valentina Meliciani & Maria Savona, 2015. "The determinants of regional specialisation in business services: agglomeration economies, vertical linkages and innovation," Journal of Economic Geography, Oxford University Press, vol. 15(2), pages 387-416.
    7. Tommaso Ciarli & Valentina Meliciani & Maria Savona, 2012. "Knowledge Dynamics, Structural Change And The Geography Of Business Services," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 445-467, July.
    8. Garbellini, Nadia, 2009. "Natural rates of profit, natural prices, and the actual economic systems - a theoretical framework," MPRA Paper 15941, University Library of Munich, Germany.
    9. repec:eee:streco:v:41:y:2017:i:c:p:53-63 is not listed on IDEAS
    10. Castellani, Davide & De Benedictis, Luca & Horgos, Daniel, 2013. "Can we really trust offshoring indices?," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 159-172.
    11. Garbellini, Nadia, 2010. "Structural Change and Economic Growth: Production in the Short Run — A generalisation in terms of vertically hyper-integrated sectors," MPRA Paper 25684, University Library of Munich, Germany.
    12. Cainelli, Giulio & Mazzanti, Massimiliano, 2013. "Environmental innovations in services: Manufacturing–services integration and policy transmissions," Research Policy, Elsevier, vol. 42(9), pages 1595-1604.
    13. Giulio Cainelli & Andrea Fracasso & Giuseppe Vittucci Marzetti, 2015. "Spatial agglomeration and productivity in Italy: A panel smooth transition regression approach," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 39-67, November.
    14. Andrea Ascani & Simona Iammarino, 2017. "Multinational enterprises, service outsourcing and regional structural change," Papers in Evolutionary Economic Geography (PEEG) 1724, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    15. Gordo, Laura Romeu & Skirbekk, Vegard, 2013. "Skill demand and the comparative advantage of age: Jobs tasks and earnings from the 1980s to the 2000s in Germany," Labour Economics, Elsevier, vol. 22(C), pages 61-69.
    16. Garbellini, Nadia & Wirkierman, Ariel Luis, 2014. "Blocks and circularity in labour requirements: An interplay between clusters and subsystems in the EU," Structural Change and Economic Dynamics, Elsevier, vol. 28(C), pages 60-74.
    17. Rinaldo Evangelista & Maria Savona, 2010. "Innovation and Employment in Services," Chapters,in: The Handbook of Innovation and Services, chapter 16 Edward Elgar Publishing.
    18. Daria Ciriaci & Sandro Montresor & Daniela Palma, 2013. "Do KIBS make manufacturing more innovative? An empirical investigation for four European countries," JRC Working Papers on Corporate R&D and Innovation 2013-04, Joint Research Centre (Seville site).

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