Service Sector Reform and Manufacturing Productivity: Evidence from Indonesia

Duggan, Victor; Rahardja, Sjamsu; Varela, Gonzalo

doi:10.1596/1813-9450-6349

Cited by 74 publications

(63 citation statements)

References 14 publications

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“…We start our analysis by developing a simple conceptual framework to guide the subsequent empirical investigation of the linkages between upstream services reforms and downstream employment 3 It is common in the literature on services policy reforms to aggregate utilities (energy, gas, water sectors) and producer services (such as telecommunication, transport, finance, retail). See for instance Arnold et al (2011), Barone and Cingano (2011), Bourlès et al (2013), Duggan et al (2013). in manufacturing. After discussing general mechanisms which are likely to govern the relationship of interest, we identify a number of features that are specific to the transition process and thus to our sample of countries.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Services policy reform and manufacturing employment: Evidence from transition economies

Fiorini

Hoekman²,

Malgouyres

2018

World Economy

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Policy reforms targeting the services sectors are a neglected dimension of the process of structural transformation and economic development. The effects of such reforms on employment across industries as a function of their use of services as intermediate inputs are theoretically ambiguous and remain largely understudied. This paper uses sector‐level data for 24 transition economies for the 1990–2012 period to assess the impacts of services policy reforms on downstream manufacturing employment. We find a negative effect of services reforms on manufacturing sector employment. This is mostly associated with the process of transition to a market‐based economy. Controlling for transition‐specific dynamics, the data suggest a neutral effect of progress towards adopting “best practice” policies for upstream services on employment in downstream manufacturing. Furthermore, in line with the extant literature, we confirm that services policy reforms enhance productivity of downstream manufacturing industries. Finally, we find that the negative effects on downstream employment are mitigated in countries with better economic governance and human capital.

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Section: Conceptual Frameworkmentioning

confidence: 99%

Services policy reform and manufacturing employment: Evidence from transition economies

Fiorini

Hoekman²,

Malgouyres

2018

World Economy

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“…More recent research on individual economies that focuses on the effects of (changes in) services policies over time finds that more open services markets are associated with better productivity performance of downstream industries. This has been shown by Arnold et al (2011) for the Czech Republic, Bas (2014) for India, and Duggan et al (2013) for Indonesia, as well as for OECD nations (Barone and Cingano 2011;Bourlès et al 2013).…”

Section: Services Trade Policies and Economic Performancementioning

confidence: 71%

Trade in services: Opening markets to create opportunities

Hoekman¹

2017

WIDER Working Paper

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This paper reviews the role of services in development and growth, the potential role of trade in services as a driver of the productivity performance of sectors that use services as inputs, and the links between services policies and domestic trade costs. Barriers to trade in services have direct as well as indirect effects on cross-border trade and investment, but research suggests that the extent to which countries will benefit from open services regimes and regional integration of services markets depends on complementary efforts to improve economic governance and regulatory regimes.

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“…The hypothesis here is that this situation is linked to the features of services policy which are restricting the performance of the service sector in Indonesia, leading to a lower observed share of services in exports. Duggan et al (2013) find that a less restrictive policy on services from current levels would have a significant effect on manufacturing sector productivity. They refer to constraints on reforms in sectors which are regarded as strategic or sensitive.…”

Section: China India and Indonesiamentioning

confidence: 87%

Policy restrictions and services performance: Evidence from 32 countries

Findlay

2014

J. Intl Econ. Comm. Policy.

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The impact of services trade and investment policy which affects the performance of the service sector is the topic of this paper. The performance indicator is not the services share of total output but the services shares in the gross value of goods exports. We find that a more restrictive environment for services delivery is associated with a lower services share in exports, but with a diminishing effect. The results remain robust even after extra measures of the ease of doing business (such as number of documents to export, number of days to export and "rank of trading across borders") are included. There is a significant relationship between policy and the share of services from domestic origin, including those from foreign invested firms, in exports, but not with the share of services from offshore sources. This result indicates that at present the more important impact of services policy reforms is via the establishment of new providers, rather than via trade across borders. This causal channel has important consequences for the political economy of reforms in services.

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Service Sector Reform and Manufacturing Productivity: Evidence from Indonesia

Cited by 74 publications

References 14 publications

Services policy reform and manufacturing employment: Evidence from transition economies

Services policy reform and manufacturing employment: Evidence from transition economies

Trade in services: Opening markets to create opportunities

Policy restrictions and services performance: Evidence from 32 countries

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