Services In Global Value Chains: From Inputs to Value-Creating Activities

Sébastien Miroudot and Charles Cadestin

No 197, OECD Trade Policy Papers from OECD Publishing

Abstract: This report provides new evidence on the role of services in global value chains (GVCs). With the release of the Trade in Value Added database, it was highlighted that services account for a larger share of world trade than suggested by traditional statistics. But this evidence does not tell the whole story about services in GVCs. In addition to services bought as inputs, there are also services activities within manufacturing firms. Moreover, manufacturing companies increasingly produce and export services either as complements or substitutes to the goods they sell. This shift to services is related to strategies aiming at adding more value and creating a long-term relationship with customers. The report highlights that services inputs, whether domestic or foreign, account for about 37% of the value of manufacturing exports in the sample of countries covered. By adding service activities within manufacturing firms, this share increases to 53% and the overall contribution of services to exports is close to two-thirds. Across countries, between 25% and 60% of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management and back-office support. SMEs are also part of this “servicification” and contribute to exports of services bundled with goods.

Keywords: bundles of goods and services; business functions; Global Value Chains; Services; servicification; trade in services; trade in value-added (search for similar items in EconPapers)
JEL-codes: F13 F14 F23 F68 L80 (search for similar items in EconPapers)
Date: 2017-03-15
New Economics Papers: this item is included in nep-int, nep-mkt and nep-tid
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Citations: View citations in EconPapers (81)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:197-en

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