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The Role of Services in the Structure of Production and Trade: Stylized Facts from a Cross-Country Analysis

Author

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  • Francois, Joseph
  • Reinert, Kenneth A

Abstract

We examine the role of services in the structure of production and trade. Working with a cross-country sample of 17 social accounting matrices, we develop stylized facts relating upstream and downstream service linkages to incomes and the input-output structure of production. Expansion of services is related to expansion of private sector intermediate services, and to increased demand in manufacturing for service inputs. This growth in demand is more closely related to changes in the structure of production rather than to outsourcing or splintering processes. The embodied service component of exports is also strongly linked to the level of development.

Suggested Citation

  • Francois, Joseph & Reinert, Kenneth A, 1995. "The Role of Services in the Structure of Production and Trade: Stylized Facts from a Cross-Country Analysis," CEPR Discussion Papers 1228, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1228
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    Citations

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    Cited by:

    1. 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.
    2. Gloria O. Pasadilla & Christine Marie M. Liao, 2007. "Has Liberalization Strengthened the Link between Services and Manufacturing?," Microeconomics Working Papers 22047, East Asian Bureau of Economic Research.
    3. Dinah Maclean, 1997. "Lagging Productivity Growth in the Service Sector: Mismeasurement, Mismanagement or Misinformation?," Staff Working Papers 97-6, Bank of Canada.
    4. J.M. Berk, 1997. "Trade flows as a channel for the transmission of business cycles," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 50(201), pages 187-212.
    5. Eschenbach, Felix & Hoekman, Bernard, 2005. "Services policy reform and economic growth in transition economies, 1990-2004," Policy Research Working Paper Series 3663, The World Bank.
    6. Harry G. Broadman, 2005. "From Disintegration to Reintegration : Eastern Europe and the Former Soviet Union in International Trade," World Bank Publications, The World Bank, number 7511.
    7. Krushna Mohan Pattanaik, 2010. "Challenges and Prospects in the Measurement of Trade in Services," Working Papers 241, Institute for Social and Economic Change, Bangalore.
    8. Guerrieri, Paolo & Meliciani, Valentina, 2005. "Technology and international competitiveness: The interdependence between manufacturing and producer services," Structural Change and Economic Dynamics, Elsevier, vol. 16(4), pages 489-502, December.
    9. Paolo Guerrieri & Bernardo Maggi & Valentina Meliciani & Pier Carlo Padoan, 2005. "Technology Diffusion, Services and Endogenous Growth in Europe. Is the Lisbon Strategy Useful?," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 221-268, January-F.
    10. Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.
    11. Metka Stare & Andreja Jaklič, 2011. "Towards Explaining Growth of Private and Public services in the Emerging Market Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 13(30), pages 581-598, June.
    12. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
    13. Jolanda Peeters & Albert de Vaal, 2003. "Explaining the Wage Gap: Intra-Industry Trade, Services Linkages and Falling Transportation Costs," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(3), pages 251-280, December.
    14. J.M. Berk, 1997. "Trade flows as a channel for the transmission of business cycles," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(201), pages 187-212.
    15. Poonam Gupta & James P. F. Gordon, 2004. "Understanding India’s Services Revolution," IMF Working Papers 04/171, International Monetary Fund.
    16. Sultan, Muyed, 2008. "The Tertiary Sector Is Going to Dominate the World Economy; Should We Worry?," MPRA Paper 14681, University Library of Munich, Germany.
    17. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena.

    More about this item

    Keywords

    Production and Services; Services and Development; Trade in Services;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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