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Servicification in Global Value Chains: The Case of Asian Countries

Author

Listed:
  • Shandre Mugan Thangavelu
  • Wang Wenxiao
  • Sothea Oum
Abstract
The paper studies the degree of servicification (or the role of services as inputs in manufacturing) of selected 61 Asian countries in terms of global value chain (GVC) activities at the sectoral level using domestic and foreign services from 1995 to 2011. We explore empirically the possible sources of servicification of the economies in terms of the factors driving the expansion of servicification. We categorize servicification activities into two types: (a) domestic servicification using domestic services and (b) foreign servicification using foreign value-added content in domestic exports. Servicification is confirmed in selected Asian countries, particularly in 16 East Asian countries associated with the Regional Comprehensive Economic Partnership (RCEP) negotiation. However, the selected Asian countries tend to have lower domestic servicification levels, but higher foreign servicification levels as compared to the overall sample of countries in the study. Countries with higher participation rates and lower positions in GVCs tend to have higher levels of foreign servicification across the sectors. In contrast, countries with higher participation rates and higher positions in GVCs tend to use more domestic services in manufacturing exports. The effect is larger for Asian countries as compared to the developed countries in the sample. The study also highlights the role of technical improvement and institutional as key factors in the development of services in the global production value chain.

Suggested Citation

  • Shandre Mugan Thangavelu & Wang Wenxiao & Sothea Oum, 2017. "Servicification in Global Value Chains: The Case of Asian Countries," Working Papers DP-2017-12, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2017-12
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    References listed on IDEAS

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    Cited by:

    1. Shandre Thangavelu & Shujiro Urata & Dionisius A Narjoko, 2021. "Impacts of the RCEP on ASEAN and ASEAN Least Developed Countries in the Post-pandemic Recovery," Working Papers PB-2021-01, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    global value chains; servicification; institutions; RCEP countries;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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