Servicification in Global Value Chains: The Case of Asian Countries
Thangavelu, Shandre Mugan; Wenxiao, Wang; Oum, Sothea | November 2017
Abstract
The paper studies the degree of servicification (or the role of services as inputs in manufacturing) of selected 61 Asian countries in terms of global value chain (GVC) activities at the sectoral level using domestic and foreign services from 1995 to 2011. We explore empirically the possible sources of servicification of the economies in terms of the factors driving the expansion of servicification. We categorize servicification activities into two types: (a) domestic servicification using domestic services and (b) foreign servicification using foreign value-added content in domestic exports. Servicification is confirmed in selected Asian countries, particularly in 16 East Asian countries associated with the Regional Comprehensive Economic Partnership (RCEP) negotiation. However, the selected Asian countries tend to have lower domestic servicification levels, but higher foreign servicification levels as compared to the overall sample of countries in the study. Countries with higher participation rates and lower positions in GVCs tend to have higher levels of foreign servicification across the sectors. In contrast, countries with higher participation rates and higher positions in GVCs tend to use more domestic services in manufacturing exports. The effect is larger for Asian countries as compared to the developed countries in the sample.
The study also highlights the role of technical improvement and institutional as key factors in the development of services in the global production value chain.
Citation
Thangavelu, Shandre Mugan; Wenxiao, Wang; Oum, Sothea. 2017. Servicification in Global Value Chains: The Case of Asian Countries. © Economic Research Institute for ASEAN and East Asia. http://hdl.handle.net/11540/7870.Keywords
Economic planning
Economic structure
Growth policy
Trade relations
Trade policy
Trade policy
Economic development
Economies in transition
International economy
Border integration
Economic integration
Gross domestic product
Trade policy
Free Trade
Trade Facilitation
Trade
Economic integration
Regional Economic Integration
Intraregional Trade
Macroeconomic
Macroeconomic Analysis
Macroeconomic Framework
Macroeconomic Models
Macroeconomic Performance
Macroeconomic Planning
Macroeconomic Policies
Macroeconomic Reform
Macroeconomic Stabilization
Regional economics
Economic forecasting
Economic development projects
Success in business
Business
Free trade
Business
Economics
Communication in economic development
Restraint of trade
International economic integration
Trade blocs
East-West
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