Servicification of Manufacturing and Boosting Productivity Through Services Sector Reform in Turkey

45 Pages Posted: 12 Nov 2018 Last revised: 13 Nov 2018

See all articles by Thomas Haven

Thomas Haven

World Bank

Erik van der Marel

European Centre for International Political Economy (ECIPE); European Center for International Political Economy

Date Written: November 9, 2018

Abstract

There is a global trend toward more production, use, and sale of services by manufacturing firms. This phenomenon is known as the servicification of manufacturing. Services inputs as well as services activities within manufacturing firms account for over half of the value of manufacturing exports. This paper uses a unique firm-level data set to analyze the link between servicification and productivity in Turkey. Although servicification has the potential to boost firm performance, the opposite appears to be the case in Turkey: manufacturing firms with service affiliates tend to be less productive. The type of services produced matters. For instance, firms that have post-manufacturing (transport and distribution) service affiliates are particularly less productive. Regulatory restrictions in services are explored as an explanatory factor. Productivity gaps appear in the same areas where services are more restricted, such as in post-manufacturing services.

Keywords: Construction Industry, Common Carriers Industry, Food & Beverage Industry, Plastics & Rubber Industry, Business Cycles and Stabilization Policies, General Manufacturing, Pulp & Paper Industry, Textiles, Apparel & Leather Industry, Transport Services, International Trade and Trade Rules, Labor Markets, Oil Refining & Gas Industry

Suggested Citation

Haven, Thomas and Marel, Erik van der, Servicification of Manufacturing and Boosting Productivity Through Services Sector Reform in Turkey (November 9, 2018). World Bank Policy Research Working Paper No. 8643, Available at SSRN: https://ssrn.com/abstract=3282025

Thomas Haven (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Erik van der Marel

European Centre for International Political Economy (ECIPE) ( email )

Rue Belliard 4-6
Brussels, 1040
Belgium

European Center for International Political Economy

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