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Servicification in Global Value Chains in Emerging and Developing Asian Economies

Author

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  • Hiroyuki Taguchi

    (Strategic Research Center, Saitama University, 255 Shimo-Okubo Sakura-Ku, Saitama 338-8570, Japan)

  • Ni Lar

    (Strategic Research Center, Saitama University, 255 Shimo-Okubo Sakura-Ku, Saitama 338-8570, Japan)

Abstract

Servicification in global value chains (GVCs) in emerging and developing Asian economies has become a trend recently. However, there have been no scientific studies to elucidate the mechanism of servicification in GVCs. To fill this gap, this study aims to investigate the involvement of service sectors in GVCs in Asian economies in terms of the quantitative interactions between service inputs and manufacturing exports and inputs and between service inputs and service exports. For this purpose, a panel vector-autoregressive model and the Trade in Value Added database of the Organization for Economic Cooperation and Development (OECD) were used for the empirical analysis during 1995–2018. The estimation results find that, first, there exist reciprocal interactions between the business services and manufacturing sectors; foreign business service inputs are induced by manufacturing exports, whereas manufacturing inputs are induced by business service exports. Second, foreign manufacturing inputs facilitate foreign business service inputs. Third, business service inputs are promoted by business service exports. These trends in the involvement of business services’ involvement in GVCs have accelerated since the mid-2000s. To enhance the role of services in GVCs, Asian economies should facilitate the removal of explicit restrictions in service trade and address regulatory divergence across countries.

Suggested Citation

  • Hiroyuki Taguchi & Ni Lar, 2024. "Servicification in Global Value Chains in Emerging and Developing Asian Economies," Economies, MDPI, vol. 12(6), pages 1-15, May.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:6:p:125-:d:1398619
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    References listed on IDEAS

    as
    1. Hiroyuki Taguchi & Mon Soe Thet, 2021. "Quantitative linkage between global value chains’ backward participation and logistics performance in the host country: a structural gravity model analysis of emerging ASEAN economies," Asia-Pacific Journal of Regional Science, Springer, vol. 5(2), pages 453-475, June.
    2. Ying Qiu, 2020. "Promotion or hindrance? The threshold effect of services on global value chains," Applied Economics Letters, Taylor & Francis Journals, vol. 27(5), pages 406-411, March.
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