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The increasing service intensity of European manufacturing

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  • Falk, Martin
  • Peng, Fei

Abstract

This paper investigates the impact of the increase in service output on the demand for different categories of service occupations in the EU manufacturing sector. Furthermore, we investigate the impact of the global sourcing of producer services on the demand for different service occupations. Using fixed-effects models based on the manufacturing sector for 18 EU countries for the period 1995-2008, we find that the employment share of service occupations is significantly and positively related to the output share of producer services in manufacturing. In particular, the increase in the output share of services accounts for an average of 13 percent of the increase in the share of service occupations. When service occupations are disaggregated by different categories, we find that the output share of services is significantly and positively related to the share of managers, professionals, and technicians. In contrast, service occupations involving clerks, administrative support, and other office-related personnel do not benefit from increasing service revenues. Finally, professionals and technicians are complementary to intermediate producer services (either from domestic or foreign suppliers), while clerks do not benefit from the rise in intermediate service inputs in manufacturing.

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  • Falk, Martin & Peng, Fei, 2011. "The increasing service intensity of European manufacturing," MPRA Paper 38600, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38600
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    3. Roman Teichert, 2019. "Digital Transformation Maturity: A Systematic Review of Literature," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(6), pages 1673-1687.
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    6. Jiang, Xuemei & Zhang, Shaoxue, 2021. "Visualizing the services embodied in global manufacturing exports," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 571(C).
    7. Owusu, Solomon & Szirmai, Adam & Foster-McGregor, Neil, 2020. "The rise of the service sector in the global economy," MERIT Working Papers 2020-056, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Antonioli, Davide & Berardino, Claudio Di & Onesti, Gianni, 2023. "The intersectoral linkages and manufacturing productivity growth in Italian regions using the I-O approach," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 120-133.
    9. Angelo Bonfanti & Manlio Del Giudice & Armando Papa, 2018. "Italian Craft Firms Between Digital Manufacturing, Open Innovation, and Servitization," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 136-149, March.
    10. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2016. "The Brexit Trade Disruption Revisited," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 17(1), pages 1-18.
    11. Alessandro Sarra & Claudio Berardino & Davide Quaglione, 2019. "Deindustrialization and the technological intensity of manufacturing subsystems in the European Union," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 205-243, April.
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    More about this item

    Keywords

    service occupations; servitization; intermediate service inputs; global sourcing; manufacturing sector;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • L8 - Industrial Organization - - Industry Studies: Services
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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