Servitization and Manufacturing Firms’ Performance: Korean Firm-Level Data Evidence
East Asian Economic Review Vol. 26 No. 4 (December 2022) 257-277, https://dx.doi.org/10.11644/KIEP.EAER.2022.26.4.413
21 Pages Posted: 10 Jan 2023
Date Written: December 30, 2022
Does servitization improve manufacturing firms’ performance, and in what condition? Following Crozet and Milet (2017)’s seminal work, this study analyzes disaggregated firm-level data that covers 40,000 South Korean manufacturing firms surveyed by the Survey of Business Activities of Korea. We compute firm-level servitization intensity with available sales data of each firm by two-digit SIC sub-sectors. We find two novel empirical regularities: Korean servitization intensity distribution shows a very different shape from the French benchmark; Servitized firms tend to perform higher profitability and higher productivity.
Keywords: Servitization, Manufacturing, Firm Performance, Productivity
JEL Classification: L25, M20, O31
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