Input tariff liberalisation and servitisation in manufacturing: Evidence from China's WTO accession
| Author | Guangjian Xu,Hongsheng Zhang,Shuzhong Ma |
| Published date | 01 December 2019 |
| Date | 01 December 2019 |
| DOI | http://doi.org/10.1111/twec.12854 |
World Econ. 2019;42:3569–3587. wileyonlinelibrary.com/journal/twec
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3569
© 2019 John Wiley & Sons Ltd
Received: 14 December 2017
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Revised: 13 June 2019
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Accepted: 10 August 2019
DOI: 10.1111/twec.12854
ORIGINAL ARTICLE
Input tariff liberalisation and servitisation in
manufacturing: Evidence from China's WTO
accession
ShuzhongMa1
|
GuangjianXu2
|
HongshengZhang1
1Zhejiang University College of Economics, Hangzhou, China
2China Jiliang University, Hangzhou, China
Email: hzhang30@163.com
Funding information
Ministry of Education of China, Grant/Award Number: 18YJC790215; National Natural Science Foundation of China, Grant/
Award Number: 71803173 and 71973120, China Postdoctoral Science Foundation, Grant/Award Number: 2017M620237 and
2018T110579
KEYWORDS
China's accession to the WTO, input trade liberalisation, manufacturing servitisation
1
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INTRODUCTION
Manufacturing servitisation (MS), also known as de‐industrialisation, service infusion or tertiarisa-
tion, which refers to the phenomenon that manufacturing firms shift their focus from pure manufac-
turing to a combination of manufacturing and services from output perspective which refers to the
share of services invested in the manufacturing process is getting higher and higher from input per-
spective, is a clear trend which has been explored and confirmed by a large amount of scholars and is
regarded as one of the most important indicators for industrial upgrading (Cui & Liu, 2018; Fontagné
& Harrison, 2017; Lay, Copani, Jäger, & Biege, 2010; Szalavetz, 2003; Vandermerwe & Rada, 1988).
How much services are included in the products has become an important indicator of enterprise
competitiveness, which also indicates the overall level of manufacturing industry of a country. Apple
and Nike are typical examples of transitioning from a pure manufacturing company to a service man-
ufacturing company.
The contribution of service industry to GDP and of manufacturing service industry to the whole
service industry have both risen to about 70% in developed countries (Cui & Liu, 2018). However, in
developing countries especially in China, both numbers are less than50%, and even surprisingly, there
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MA et Al.
is a negative trend for China's manufacturing servitisation after her accession to the WTO (see Figure
11). This paper uses the difference‐in‐difference (DID) method to examine the influence of input trade
liberalisation (ITL) on China's manufacturing servitisation (MS), taking China's WTO accession as a
1 After reference to China's national economic industry classification [CIC] and code [GB/4754‐2011] and WIOD input and
output table of the industry classification, we divided 14 manufacturing industries, see Appendix Table A1, column (1), row
c3–c16. In addition, we divide the service industry into four categories: distribution services [c19–c21], transportation
services [c23–26], telecommunication services [c27] and financial services [c28].
FIGURE 1 China's Manufacturing Servitisation over 1996–2011
Notes: The MS is calculated by authors using data from WorldInput Output Database (WIOD) input–output table,
covering 14 manufacturing industries in WIOD: 3: food, beverages and tobacco; 4: textiles and textile products; 5:
leather, leather and footwear; 6: wood and products of wood and cork; 7: pulp, paper, paper, printing and publishing;
8: coke, refined petroleum and nuclear fuel; 9: chemicals and chemical products; 10: rubber and plastics; 11: other
nonmetallic mineral; 12: basic metals and fabricated metal; 13: machinery, nec; 14: electrical and optical equipment;
15: transport equipment; 16: manufacturing, nec; recycling [Colour figure can be viewed at wileyonlinelibrary.com]
3
4
5
.04 .06 .08 .1 .12 .14
Manufacturing Servitisation
1995 2000 2005 2010
Year
(1)
7
8
.4 .45 .5 .55 .6
Manufacturing Servitisation
1995 2000 2005 2010
Year
(2)
10
9
6
11
.05 .1 .15 .2 .25 .3
Manufacturing Servitisation
1995 2000 2005 2010
Year
(3)
15
14
12
13
16
.1 .2 .3 .4
Manufacturing Servitisation
1995 2000 2005 2010
Year
(4)
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