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Export Performance and Increased Services Content in Manufacturing

Published online by Cambridge University Press:  26 March 2020

Yvonne Wolfmayr
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Abstract

Against the background of the increasing services content of many manufactured goods, the paper attempts to assess the role of (domestically and internationally) purchased service inputs for the relative export performance of countries in a particular manufacturing industry. It estimates an empirical model of export market shares for EU15 countries and twelve disaggregated manufacturing industries over the period 1995 to 2007. Whereas most traditional explanations are based on the influence of relative costs and technology-related variables, this paper emphasises the importance of services as a determinant of both product quality and the sectors’ productivity. The service linkage variables are based on national input–output tables. The analysis finds a positive and highly significant impact of services on export market shares of manufactured goods. Distinguishing between domestically-sourced service inputs and imports results in a robust and highly significant impact of international service linkages, while the analysis finds no impact of domestic service linkages.

Keywords

Manufacturing-service linkagesproducer servicesexport market share
Type
Research Articles
Information
National Institute Economic Review , Volume 220 , April 2012 , pp. R36 - R52
Copyright
Copyright © 2012 National Institute of Economic and Social Research

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Footnotes

This research was undertaken as part of the SERVICEGAP project, funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities, Grant Agreement no. 244552. I would like to thank Irene Langer for her excellent help in the collection of data and research assistance and two anonymous referees for valuable comments and suggestions.

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