The role of services content for manufacturing competitiveness: A network analysis.

ABSTRACT

This paper explores the phenomenon of international servicification of manufacturing from the period 1995 to 2011. By applying empirical techniques of Social Network Analysis and graph theory, we find that the network of flows of intermediate services embodied in manufacturing exports is still slightly dense and would not correspond to a traditional centre-periphery structure. The mapping shows a numerous, highly cohesive group of countries, with China, the USA and Germany as central economies and an increasing leading role of Asian economies, which would indicate their commitment to upgrading within global value chains. We go a step further by empirically analysing the impact of the countries' centrality in the global network of intermediate services on manufacturing competitiveness. Our findings reveal that, together with the level of embodiment of intermediate services into manufacturing exports, who the providers of those services inputs are is a key determining factor for manufacturing competitiveness.