IDEAS home Printed from https://ideas.repec.org/p/wii/rpaper/rr404.html
   My bibliography  Save this paper

The Relation between Industry and Services in Terms of Productivity and Value Creation

Author

Listed:
  • Paul Baker
  • Neil Foster-McGregor

    (The Vienna Institute for International Economic Studies, wiiw)

  • Koenen Johannes
  • Sandra M. Leitner

    (The Vienna Institute for International Economic Studies, wiiw)

  • Julia Schricker
  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

  • Thomas Strobel
  • Jurgen Vermeulen
  • Hans-Günther Vieweg
  • Anastasia Yagafarova

Abstract

Summary The share of manufacturing in GDP is declining, whereas the share of services – and business-related services in particular – is rising in almost all advanced economies. However, as these industries are mutually dependent in various ways this study focuses on the manufacturing sector as a user of activities provided by the services industries and – in particular – the way the latter contributes to productivity and value creation in the former. To the extent that this is the case, manufacturing industries benefit from a vibrant business-services industry and themselves play an important ‘carrier function’ of services – issues which are addressed by considering manufacturing activities in a value chain approach. As a consequence, EU Member States facing a declining share of manufacturing might still be part of the manufacturing value chain via the provision of services whereas other countries benefit from services provided by other countries. The role of cross-border flows of services and the patterns of outsourcing and offshoring of such activities across Europe is therefore gaining importance. It is argued that a differentiated pattern of specialisation emerged within Europe with a set of countries keeping a stronghold in manufacturing industries and others are specialising in the provision of related services, whereas some countries have faced a decline in their manufacturing shares, but have not succeeded in increasing their specialisation in business services either. The first four sections of the study present selected quantitative indicators concerning the ‘manufacturing value chains’, discuss the relative importance of the manufacturing–services interaction and its cross-border dimensions, and point towards differences across countries, industries and services activities, and the respective changes over time. Further, impacts of these interactions on manufacturing performance are addressed econometrically. The following two sections highlight important dimensions of services use in manufacturing and issues related to services trade and potential barriers in that respect for selected industries and countries, incorporating both quantitative and qualitative insights.

Suggested Citation

  • Paul Baker & Neil Foster-McGregor & Koenen Johannes & Sandra M. Leitner & Julia Schricker & Robert Stehrer & Thomas Strobel & Jurgen Vermeulen & Hans-Günther Vieweg & Anastasia Yagafarova, 2015. "The Relation between Industry and Services in Terms of Productivity and Value Creation," wiiw Research Reports 404, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:rpaper:rr:404
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/the-relation-between-industry-and-services-in-terms-of-productivity-and-value-creation-dlp-3640.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anita Wölfl, 2003. "Productivity Growth in Service Industries: An Assessment of Recent Patterns and the Role of Measurement," OECD Science, Technology and Industry Working Papers 2003/7, OECD Publishing.
    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. Sandra M. Leitner & Manuel Marcias & Daniel Mirza & Robert Stehrer & Roman Stöllinger, 2016. "The Future Development of EU Industry in a Global Context," wiiw Research Reports 409, The Vienna Institute for International Economic Studies, wiiw.
    2. Stöllinger, Roman, 2021. "Testing the Smile Curve: Functional Specialisation and Value Creation in GVCs," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 93-116.
    3. Robert Stehrer, 2020. "Konvergenz, Produktionsintegration und Spezialisierung in Europa seit 1995," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1-Q2/20, pages 49-59.
    4. Tanel Rebane, 2018. "Complementarities In Performance Between Product Innovation, Marketing Innovation And Cooperation With Clients," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 113, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    5. Sergey Bodrunov, 2021. "Noonomy as the Material Basis for a Prospective Humanitarian Model of Public Order," Sustainability, MDPI, Open Access Journal, vol. 13(3), pages 1-20, January.
    6. Ferrando, Annalisa & Rossi, Stefania P. S. & Bonanno, Graziella, 2020. "Determinants of firms’ efficiency: do innovations and finance constraints matter? The case of European SMEs," Working Paper Series 2419, European Central Bank.
    7. 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.

    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. Lee, Jong-Wha, 2005. "Human capital and productivity for Korea's sustained economic growth," Journal of Asian Economics, Elsevier, vol. 16(4), pages 663-687, August.
    2. Robert Inklaar & Marcel P. Timmer & Bart van Ark, 2008. "Data for Productivity Measurement in Market Services: An International Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 72-81, Spring.
    3. Hartwig, Jochen, 2008. "What drives health care expenditure?--Baumol's model of 'unbalanced growth' revisited," Journal of Health Economics, Elsevier, vol. 27(3), pages 603-623, May.
    4. Anita Wölfl, 2004. "Productivity Growth in Services Industries: Is There a Role for Measurement?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 66-80, Spring.
    5. Alexander Eickelpasch & Georg Erber, 2014. "Analyse der Ansatzpunkte der volkswirtschaftlichen Produktivitätsanalyse von wissensintensiven Dienstleistungen in der amtlichen Statistik: Endbericht; Forschungsprojekt im Auftrag des Fraunhofer-Inst," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 80, number pbk80, July.
    6. Jochen Hartwig, 2008. "Has Health Capital Formation Cured 'Baumol's Disease'? - Panel Granger Causality Evidence for OECD Countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
    7. repec:clr:wugarc:y:2011:v:37i:2p:269 is not listed on IDEAS
    8. Zúniga-González, Carlos Alberto, 2012. "Current expenditure impact on the municipality management productivity of Nicaragua, 2007-2011," Working Papers 140548, National Autonomous University of Nicaragua, León (Unan-León), Researching Center for Applied Economics (RCAE).
    9. Maroto-Sánchez, Andrés & Cuadrado-Roura, Juan R., 2009. "Is growth of services an obstacle to productivity growth? A comparative analysis," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 254-265, December.
    10. Rabeh Morrar & Faïz Gallouj, 2016. "The growth of the service sector in Palestine: the productivity challenge," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 179-204.
    11. Jochen Hartwig, 2007. "Ist die «Baumol’sche Krankheit» geheilt?," KOF Analysen, KOF Swiss Economic Institute, ETH Zurich, vol. 1(4), pages 23-31, December.
    12. Mitsuru Mizuno, 2005. "Development Of The Service Sector In Japan And Its Implications For The Economy," Pacific Economic Review, Wiley Blackwell, vol. 10(4), pages 485-492, December.
    13. Jochen Hartwig, 2005. "Sind unsere gesamtwirtschaftlichen Probleme ueberhaupt loesbar?," KOF Working papers 05-112, KOF Swiss Economic Institute, ETH Zurich.
    14. Henk L.M. Kox, 2004. "The contribution of business services to aggregate productivity growth," Industrial Organization 0402005, University Library of Munich, Germany.
    15. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Occasional Papers 0607, Banco de España.
    16. Saltari, Enrico & Wymer, Clifford R. & Federici, Daniela, 2013. "The impact of ICT and business services on the Italian economy," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 110-118.
    17. Cassidy, Mark, 2004. "Productivity in Ireland: Trends and Issues," Quarterly Bulletin Articles, Central Bank of Ireland, pages 83-105, April.

    More about this item

    Keywords

    manufacturing-service interaction; EU-wide specialisation; manufacturing value chains; industry studies;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L8 - Industrial Organization - - Industry Studies: Services
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:wii:rpaper:rr:404. 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: . General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

    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: Customer service (email available below). General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.