Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India

This paper explores the relationship between the use of service inputs, participation in global value chains, and firm productivity. Services play the role of both an intermediate input in production and a coordinator. Using a detailed Indian firm-...

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Main Authors:	Manghnani, Ruchita, Meyer, Birgit, Saez, Sebastian, van Der Marel, Erik
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	GLOBAL VALUE CHAIN SERVICE INPUTS FIRM PRODUCTIVITY COMPLEX SERVICES FOREIGN DIRECT INVESTMENT EXPORTS IMPORTS
Online Access:	http://documents.worldbank.org/curated/undefined/839451634654247101/Firm-Performance-Participation-in-Global-Value-Chains-and-Service-Inputs-Evidence-from-India http://hdl.handle.net/10986/36432

id	okr-10986-36432
recordtype	oai_dc
spelling	okr-10986-364322021-10-29T05:10:47Z Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India Manghnani, Ruchita Meyer, Birgit Saez, Sebastian van Der Marel, Erik GLOBAL VALUE CHAIN SERVICE INPUTS FIRM PRODUCTIVITY COMPLEX SERVICES FOREIGN DIRECT INVESTMENT EXPORTS IMPORTS This paper explores the relationship between the use of service inputs, participation in global value chains, and firm productivity. Services play the role of both an intermediate input in production and a coordinator. Using a detailed Indian firm-level data set from 1990–2017, the paper estimates the productivity premium associated with varying depths of global value chain integration and different intensities and types of services used in the production. The study finds that firms in global value chains have a productivity premium between 13 and 22 percent relative to domestic firms, with some variation based on the depth of global value chain integration and the sector to which the firm belongs. Both the type of service inputs used (composition of services) and the origin of services (whether sourced domestically or from abroad) matter for firm performance. While higher aggregate service input use (as captured by the share of expenditure on service inputs) is not necessarily associated with an increase in productivity, increased use of complex services and information technology services is associated with higher productivity. The use of imported services is associated with higher productivity. Moreover, firms that are more deeply integrated in global value chains benefit more from importing services. 2021-10-28T14:47:36Z 2021-10-28T14:47:36Z 2021-10 Working Paper http://documents.worldbank.org/curated/undefined/839451634654247101/Firm-Performance-Participation-in-Global-Value-Chains-and-Service-Inputs-Evidence-from-India http://hdl.handle.net/10986/36432 English Policy Research Working Paper;No. 9814 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	GLOBAL VALUE CHAIN SERVICE INPUTS FIRM PRODUCTIVITY COMPLEX SERVICES FOREIGN DIRECT INVESTMENT EXPORTS IMPORTS
spellingShingle	GLOBAL VALUE CHAIN SERVICE INPUTS FIRM PRODUCTIVITY COMPLEX SERVICES FOREIGN DIRECT INVESTMENT EXPORTS IMPORTS Manghnani, Ruchita Meyer, Birgit Saez, Sebastian van Der Marel, Erik Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
geographic_facet	South Asia India
relation	Policy Research Working Paper;No. 9814
description	This paper explores the relationship between the use of service inputs, participation in global value chains, and firm productivity. Services play the role of both an intermediate input in production and a coordinator. Using a detailed Indian firm-level data set from 1990–2017, the paper estimates the productivity premium associated with varying depths of global value chain integration and different intensities and types of services used in the production. The study finds that firms in global value chains have a productivity premium between 13 and 22 percent relative to domestic firms, with some variation based on the depth of global value chain integration and the sector to which the firm belongs. Both the type of service inputs used (composition of services) and the origin of services (whether sourced domestically or from abroad) matter for firm performance. While higher aggregate service input use (as captured by the share of expenditure on service inputs) is not necessarily associated with an increase in productivity, increased use of complex services and information technology services is associated with higher productivity. The use of imported services is associated with higher productivity. Moreover, firms that are more deeply integrated in global value chains benefit more from importing services.
format	Working Paper
author	Manghnani, Ruchita Meyer, Birgit Saez, Sebastian van Der Marel, Erik
author_facet	Manghnani, Ruchita Meyer, Birgit Saez, Sebastian van Der Marel, Erik
author_sort	Manghnani, Ruchita
title	Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
title_short	Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
title_full	Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
title_fullStr	Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
title_full_unstemmed	Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India
title_sort	firm performance, participation in global value chains and service inputs : evidence from india
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/undefined/839451634654247101/Firm-Performance-Participation-in-Global-Value-Chains-and-Service-Inputs-Evidence-from-India http://hdl.handle.net/10986/36432
_version_	1764485237780250624

Firm Performance, Participation in Global Value Chains and Service Inputs : Evidence from India

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