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Manufacturing Productivity: Effects of Service Sector Innovations and Institutions

Author

Listed:
  • Neil Foster-McGregor

    (The Vienna Institute for International Economic Studies, wiiw)

  • Johannes Pöschl
  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

A major international transmission channel of productivity increases is trade in intermediate products and services. This paper analyses international rent spillovers at the industry level and for the first time investigates effects from the service sector in this international framework. The World Input-Output Database (WIOD) allows us to improve over the traditional approach of using trade in intermediates in the estimation of international spillovers by making use of input-output linkages between industries in different countries. Our results using this novel approach confirm the productivity effects from international manufacturing spillovers found in recent literature. As regards services, which provide a substantial component of the manufacturing sectors’ inputs, our results indicate significant positive productivity effects from innovations in this sector. Furthermore, we control for the effect of domestic institutions on productivity. A high quality of contract enforcement and property rights protection is found to foster firm development and increase productivity in the country. Last but not least educational institutions in the reporter country are an important determinant of productivity developments.

Suggested Citation

  • Neil Foster-McGregor & Johannes Pöschl & Robert Stehrer, 2012. "Manufacturing Productivity: Effects of Service Sector Innovations and Institutions," wiiw Working Papers 89, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:89
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    References listed on IDEAS

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    Cited by:

    1. Neil Foster-McGregor & Johannes Pöschl, 2016. "Productivity effects of knowledge transfers through labour mobility," Journal of Productivity Analysis, Springer, vol. 46(2), pages 169-184, December.
    2. Ewa Cieślik, 2022. "A New Era Is Beginning in Central and Eastern Europe: Information and Communication Technology Services Exceed Manufacturing in the Global Production Chain," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2607-2639, December.
    3. Eduardo Gonçalves & Fernando Salgueiro Perobelli & Inácio Fernandes Araújo, 2017. "Estimating intersectoral technology spillovers for Brazil," The Journal of Technology Transfer, Springer, vol. 42(6), pages 1377-1406, December.
    4. Ewa Cieślik, 2020. "Cross-Sectoral Inter-Country Linkages under the Belt and Road Initiative: Chinese ICT Services Value Added Inflows to Manufacturing Exports in the New Eurasian Land Bridge Economies," Sustainability, MDPI, vol. 12(20), pages 1-20, October.

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    More about this item

    Keywords

    productivity; research and development; services; spillovers; institutions;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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