Report SeriesDOI
The Role of Services for Competitiveness in Manufacturing
Hildegunn Kyvik Nordås,Yunhee Kim +1 more
- Iss: 148, pp 1-57
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TLDR
In this paper, the relationship between competitiveness in manufacturing and the quality of key supporting services is analyzed, and it is concluded that new ways of doing business where manufacturers build relationships with customers and compete on the basis of products they are willing to pay a premium for has the potential to become an important driving force for growth after the great recession, provided that adequate support from competitive services markets is in place.Abstract:
This study analyses the relationships between competitiveness in manufacturing and the quality of key supporting services. Three indicators of competitiveness are considered: the degree of product differentiation, unit prices obtained in export markets and the duration of trade. The density of telecoms networks and the reliability of electricity supply stand out as the most crucial for competitive manufacturing. In addition the ease at which contracts can be enforced and the time it takes to export and import goods are strongly related to competitiveness. Our methodology allows us to go beyond a one size fits all policy analysis. Interestingly, we find that in low-income countries, the impact of services quality and policy on competitiveness is highest in low-technology industries; in middle-income countries it is highest in medium-technology sectors and in high-income countries the impact is highest in medium-high and high-technology industries. This suggests that better services contribute to moving up the value chain in industries where a country already has technological capacity and comparative advantage, but better services alone may not stimulate product differentiation in sectors where a country is far from the competitive edge – at least not in the short run. Policy reforms needed are to simplify procedures for contract enforcement, liberalisation of FDI, strengthen pro-competitive regulation of network services, and eliminate tariffs. It is concluded that new ways of doing business where manufacturers build relationships with customers and compete on the basis of products they are willing to pay a premium for has the potential to become an important driving force for growth after the great recession, provided that adequate support from competitive services markets is in place.read more
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Report SeriesDOI
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References
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Posted Content
A ‘Manufacturing Imperative’ in the EU – Europe's Position in Global Manufacturing and the Role of Industrial Policy
Neil Foster-McGregor,Mario Holzner,Michael Landesmann,Johannes Pöschl,Robert Stehrer,Roman Stöllinger +5 more
TL;DR: The main challenges ahead of European manufacturing given the structural changes that occurred in the EU over the period 1995 to 2011 have been identified in this article, and a number of industrial policy measures that are important in a European context have been discussed.
Journal ArticleDOI
The ability of current statistical classifications to separate services and manufacturing
TL;DR: This paper finds that a large share of firms, almost 20%, are not classified as expected based on a comparison of their statements of activities with the assigned industry codes, and provides a quantification of the flaws in classifications of firms.
Journal ArticleDOI
The role of the exchange rate regime in the process of real and nominal convergence
Gaetano D'Adamo,Riccardo Rovelli +1 more
TL;DR: In this paper, the authors argue that the choice of the exchange rate regime may affect nominal convergence in European catching-up countries and show that, for countries that pegged to or adopted the euro, the effect of an increase in dual productivity growth (the difference in productivity growth between the traded and non-traded sectors) on the dual inflation differential is twice as large as that in flexible countries.
Posted Content
Labor Market Institutions and the Response of Inflation to Macro Shocks in the EU: A Two-Sector Analysis
TL;DR: In this article, the role of labor market institutions in the response of inflation to labor market and exchange rate shocks in the EU was investigated empirically, and it was shown that increased wage coordination and more expenditure on labor market policies flatten the Phillips curve in both sectors.