Abstract
This paper explores the phenomenon of international servicification of manufacturing from the period 1995 to 2011. By applying empirical techniques of Social Network Analysis and graph theory, we find that the network of flows of intermediate services embodied in manufacturing exports is still slightly dense and would not correspond to a traditional centre-periphery structure. The mapping shows a numerous, highly cohesive group of countries, with China, the USA and Germany as central economies and an increasing leading role of Asian economies, which would indicate their commitment to upgrading within global value chains. We go a step further by empirically analysing the impact of the countries’ centrality in the global network of intermediate services on manufacturing competitiveness. Our findings reveal that, together with the level of embodiment of intermediate services into manufacturing exports, who the providers of those services inputs are is a key determining factor for manufacturing competitiveness.
Highlights
The growing importance of services in international trade is widely supported by the empirical literature
Manufacturing competitiveness is measured by a modified version of revealed comparative advantage (RCA)
The role of services content for manufacturing competitiveness: A network analysis indexes and the results obtained when we correlate the betweenness binary indexes (RWBC) with the strengths of countries would indicate that those economies with the most intense links would presumably be the ones that will gain a more central role as intermediaries within the network
Summary
The growing importance of services in international trade is widely supported by the empirical literature. Countries with low labour costs often integrate into GVCs by focusing on manufacturing and assembly phases They require access to high-quality, highly specialised services in order to maintain and improve their position in the network. The first is to identify the “expert suppliers” within the global network formed by cross-border exchanges of intermediate services embodied in manufacturing exports, and the evolution of the network over time To do this analysis, we will use data from TiVA database and will apply Social Network Analysis (SNA, hereafter) tools and graph theory to this world network. Dıaz-Mora et al [18] study the impact of foreign services value added embodied in manufacturing exports on export duration for a sample of 63 OECD and non-OECD countries in the period 1995–2014 Their findings show a positive effect that is more pronounced for developing and emerging economies and helps export relationships to be more resilient.
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