Manufacturing Firms As Services Providers: What The Belgian Data Show

Abstract

This paper investigates the role of firm and sector characteristics for servitisation of firms, i.e. the provision of services by manufacturing firms. First, it discusses theoretical arguments based on demand complementarity between a firm’s goods and services, nonrivalry in the allocation of expertise between the production of goods and that of services and the degree of competition. Second, descriptive evidence highlights heterogeneity in service intensity between and within sectors, and a possible non-linear relationship between service intensity and firm efficiency. Third, an econometric assessment points to a Ushaped relationship between servitisation and firm productivity, depending on the sector of activity. JEL classification: D24, D29, L11, L22, L23, L25.