Does greater use of services’ inputs in manufacturing increase the global value chain (GVC) activities of the firms? In this study, we analyse the effects of servicifica- tion on the GVC activities of manufacturing firms in India. Using panel data of 4608 Indian manufacturing firms from 2001 to 2018, we examine the effects of servicification of manufacturing firms on their decision to participate in GVCs. The study examines the overall service inputs in manufacturing activities and its impact on GVC activities of firms. The results indicate that servicification of manu- facturing tends to have a positive impact on GVC activities of firms. We also observe positive impact on Indian small and medium enterprises (SMEs) to participate in the GVC through the servicification of manufacturing. Further, the results also indicate the differential impact of servicifica- tion between high- and low-technology industries.
Authors:
Ketan Reddy (Postdoctoral Research Associate, King’s India Institute, King’s College London).
Subash Sasidharan (Department of Humanities and Social Sciences, Indian Institute of Technology, Madras, Chennai, Tamil Nadu, India)
Shandre Thangavelu (Institute of International Trade, The University of Adelaide, Adelaide, South Australia, Australia and Jeffrey Cheah Institute for Southeast Asia, Sunway University, Selangor, Malaysia).
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