The Export Effect of Servitization of Manufacturing

7 Pages Posted: 11 Nov 2022

See all articles by Hyunsoo Kim

Hyunsoo Kim

Korea Institute for International Economic Policy

Jungu Kang

Korea Institute for International Economic Policy

Hyeyoon Keum

Korea Institute for International Economic Policy

Jae Wook Jung

Sogang University

Date Written: September 2, 2022

Abstract

This study examines the status and characteristics of Korea’s servitization of manufacturing and its impact on business performance and exports. In particular, we focus on servitization in manufacturing, which can be seen as a part of servicification in manufacturing. It is the phenomenon of manufacturing firms producing more services as final goods and provide them to the market with their products. Looking at the status of servitization in the manufacturing sectors focusing on the service sales generated by manufacturing firms, the servitization in manufacturing in Korea has gradually increased. Sales in service sectors, which stood at 4.5% of the total sales of manufacturing firms in 2012, surged to 15.9% in 2017, and then decreased to 6.9% in 2019. Based on the stylized fact that servitization in manufacturing in Korea has gradually increased, we empirically analyze the effect of servitization in manufacturing on the business performances and exports. The result suggets that the servitization in manufacturing is progressing in the direction of improving firm’s productivity, profitability, and exports.

Keywords: Servicification, Servitization, Export

Suggested Citation

Kim, Hyunsoo and Kang, Jungu and Keum, Hyeyoon and Jung, Jae Wook, The Export Effect of Servitization of Manufacturing (September 2, 2022). KIEP Research Paper, World Economy Brief 22-36, Available at SSRN: https://ssrn.com/abstract=4272014 or http://dx.doi.org/10.2139/ssrn.4272014

Hyunsoo Kim (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Jungu Kang

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Hyeyoon Keum

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Jae Wook Jung

Sogang University ( email )

35 Baekbeom-ro
Mapo-gu
Seoul, Seoul 04107
Korea, Republic of (South Korea)

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