Producer Services and Manufacturing Productivity: Evidence from Japan Industrial Productivity Database
As service sectors account for a growing share of economic activity in advanced economies, economists claim that the quality and cost of producer services supplied by the service sectors are crucial in supporting the competitiveness of manufacturing firms. This paper provides an empirical assessment on this argument by exploring a link between service-sector performance and manufacturing productivity in Japan for the period 1980-2005. Assuming that an improvement in producer services is measured with errors by a price deflator growth of service outputs, I propose an estimation framework in which an observed productivity depends partly on the performance of service sectors weighted by service-input intensities. Robust to a wide range of specifications and alternative indicators of services upgrading, I find little evidence that the service sectors contributed to productivity growth of the manufacturing sector. Thus, my findings do not support the claim that the upgrading of producer services improves manufacturing competitiveness.
|Date of creation:||Jul 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ier.hit-u.ac.jp/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sanghoon Ahn & Kyoji Fukao & Keiko Ito, 2008. "Outsourcing in East Asia and its impact on the Japanese and Korean Labour Markets," OECD Trade Policy Papers 65, OECD Publishing.
- Görg, Holger & Hanley, Aoife, 2004.
"Does Outsourcing Increase Profitability?,"
IZA Discussion Papers
1372, Institute for the Study of Labor (IZA).
- Abraham, Katharine G & Taylor, Susan K, 1996.
"Firms' Use of Outside Contractors: Theory and Evidence,"
Journal of Labor Economics,
University of Chicago Press, vol. 14(3), pages 394-424, July.
- Katharine G. Abraham & Susan K. Taylor, 1993. "Firms' Use of Outside Contractors: Theory and Evidence," NBER Working Papers 4468, National Bureau of Economic Research, Inc.
- Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
- Arnold, Jens Matthias & Mattoo, Aaditya & Narciso, Gaia, 2006.
"Services inputs and firm productivity in Sub-Saharan Africa : evidence from firm-level data,"
Policy Research Working Paper Series
4048, The World Bank.
- Jens Matthias Arnold & Aaditya Mattoo & Gaia Narciso, 2008. "Services Inputs and Firm Productivity in Sub-Saharan Africa: Evidence from Firm-Level Data," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(4), pages 578-599, August.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
- Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.
- Oulton, Nicholas, 2001.
"Must the Growth Rate Decline? Baumol's Unbalanced Growth Revisited,"
Oxford Economic Papers,
Oxford University Press, vol. 53(4), pages 605-27, October.
- Nicholas Oulton, 2000. "Must the growth rate decline? Baumol's unbalanced growth revisited," Bank of England working papers 107, Bank of England.
- Sourafel Girma & Holger Görg, 2003.
"Outsourcing, Foreign Ownership and Productivity: Evidence from UK Establishment Level Data,"
Discussion Papers of DIW Berlin
361, DIW Berlin, German Institute for Economic Research.
- Sourafel Girma & Holger Görg, 2004. "Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment-level Data," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 817-832, November.
- Donald Siegel & Zvi Griliches, 1992.
"Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing,"
in: Output Measurement in the Service Sectors, pages 429-460
National Bureau of Economic Research, Inc.
- Donald Siegel & Zvi Griliches, 1991. "Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing," NBER Working Papers 3678, National Bureau of Economic Research, Inc.
- Francois, Joseph F, 1990. "Producer Services, Scale, and the Division of Labor," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 715-29, October.
- Simeon Djankov & Caroline Freund & Cong S. Pham, 2010.
"Trading on Time,"
The Review of Economics and Statistics,
MIT Press, vol. 92(1), pages 166-173, February.
- Ten Raa, T. & Wolff, E.N., 2000.
"Outsourcing of Services and the Productivity Recovery in U.S. Manufacturing in the 1980s and 1990s,"
2000-32, Tilburg University, Center for Economic Research.
- Thijs Raa & Edward Wolff, 2001. "Outsourcing of Services and the Productivity Recovery in U.S. Manufacturing in the 1980s and 1990s," Journal of Productivity Analysis, Springer, vol. 16(2), pages 149-165, September.
- Fernandes, Ana M. & Paunov, Caroline, 2008. "Foreign direct investment in services and manufacturing productivity growth: evidence for Chile," Policy Research Working Paper Series 4730, The World Bank.
- Kazuyuki Motohashi, 2003.
"Firm level analysis of information network use and productivity in Japan,"
03021, Research Institute of Economy, Trade and Industry (RIETI).
- Motohashi, Kazuyuki, 2007. "Firm-level analysis of information network use and productivity in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 21(1), pages 121-137, March.
- Kazuyuki Motohashi, 2004. "Firm level analysis of information network use and productivity in Japan," Hi-Stat Discussion Paper Series d03-14, Institute of Economic Research, Hitotsubashi University.
- Arnold, Jens & Javorcik, Beata S. & Mattoo, Aaditya, 2007.
"Does services liberalization benefit manufacturing firms ? Evidence from the Czech Republic,"
Policy Research Working Paper Series
4109, The World Bank.
- Arnold, Jens M. & Javorcik, Beata S. & Mattoo, Aaditya, 2011. "Does services liberalization benefit manufacturing firms?: Evidence from the Czech Republic," Journal of International Economics, Elsevier, vol. 85(1), pages 136-146, September.
When requesting a correction, please mention this item's handle: RePEc:hst:ghsdps:gd09-076. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino)
If references are entirely missing, you can add them using this form.