CEPII, Recherche et Expertise sur l'economie mondiale
The Servitization of French Manufacturing Firms

Matthieu Crozet
Emmanuel Milet

 Highlights :
  • We exploit balance sheet information for a very large sample of French firms to give an account of the production of services by manufacturing firms
  • The production of services for third parties by manufacturing firms is not negligible. In 2007, services accounted for 11.4% of aggregate sales of manufacturing firms. About 83% of French manufacturers sold some services, about a third sold more services than goods.
  • Between 1997 and 2007, the share of services in manufacturing total output grown slowly but steadily.

 Abstract :
The story of deindustrialization of developed economies is now old and well-observed. In most developed countries, value added by manufacturing as a percentage of GDP has decreased continuously since the 1950's, and is now less than 15% in most OECD countries.  The shift of value added and employment away from manufacturing toward services may be even deeper than suggested by data based on sectoral classification. As the complexity and diversity of firms' activities grow, the boundary between services and industries becomes increasingly elusive. This paper uses detailed balance sheet data from a very large panel of French firms to examine the production and the sales of services by manufacturing firms. Our data reveals that 83% of firms registered in manufacturing sectors provide services for third parties, and nearly one-third of these firms provide more services than goods. Additionally, we find that from 1997-2007 manufacturing firms have increased their production of services. This growing trend in "servitization" suggests that deindustrialization, already observed on a country-scale, is also taking place within firms.

 Keywords : Désindustrialisation | Servitisation

 JEL : D2, L8
CEPII Working Paper
N°2014-10, May 2014

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 Fields of expertise

Competitiveness & Growth