The Contribution of Services to Exports in Emerging Europe Countries

Abstract

This paper aims at estimating the true role services are playing for exports in emerging European countries, starting from recent evidence in the literature that this contribution is underestimated by conventional statistics (balance of payments). This paper follows the line of research that analyses the interconnections between manufacturing industries and services sectors in a new type of economy where value is created by combining the two functions together. The methodology employed uses input-output tables in order to disentangle export flows in value added components by two criteria: origin (domestic or imported) and sector (services or manufacturing). The empirical findings show that in seven out of ten countries in the sample the actual contribution of services to exports is higher than that of manufacturing. Moreover, there is also strong evidence on the servicification of manufacturing.
Keywords: Competitiveness, Global value chains, Services, Servicification, Value added trade.