Services Development and Comparative Advantage in Manufacturing
Most manufacturing activities use inputs from the financial and business services sectors. But these services sectors also compete for resources with manufacturing activities, provoking concerns about de-industrialization -- financial services in i...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/397091526992884480/Services-development-and-comparative-advantage-in-manufacturing http://hdl.handle.net/10986/29860 |
| Summary: | Most manufacturing activities use inputs
from the financial and business services sectors. But these
services sectors also compete for resources with
manufacturing activities, provoking concerns about
de-industrialization -- financial services in industrial
countries like the United States and the United Kingdom, and
business services in developing countries like India and the
Philippines. This paper examines the implications of
services development for the export performance of
manufacturing sectors. It develops a methodology to quantify
the indirect role of services in international trade in
goods and constructs new measures of revealed comparative
advantage based on domestic value added in gross exports.
The paper shows that the development of financial and
business services enhances the revealed comparative
advantage of manufacturing sectors that use these services
intensively but not that of other manufacturing sectors. It
also finds that a country can partially overcome the
handicap of an underdeveloped domestic services sector by
relying more on imported services inputs. Thus, lower
services trade barriers in developing countries can help to
promote their manufacturing exports. |
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