TITLE:
Servitization, Market Power and Export of Firms
AUTHORS:
Can Song, Ruoshui Yu
KEYWORDS:
Servitization, Market Power, Manufacturing Firms, Export of Firms
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.6,
June
30,
2023
ABSTRACT: Following the growing penetration of service industry into manufacturing
industry, this paper verifies the effect of manufacturing firm servitization on
exports and reviews the regulating effect mechanism of corporate market power.
Firstly, this paper constructs a theoretical model including the selection of
service business strategy and the selection of corporation export, and
elaborates on the effect mechanism among servitization, market power and export
of firms. Secondly, this paper precisely describes the servitization indicators
of listed manufacturing firms in China at the microscopic level from 2004 to
2016 based on the corporate business activities released in the annual reports
of listed firms, the innovative research perspective of service business
strategy selection and two levels, including the breadth and depth of
servitization. Finally, the paper applies PPLM (Poisson Pseudo Maximum
Likelihood) regression method to the research based on theoretical analysis and
indicator formulation. The research findings are as follows: First,
servitization significantly improves the export tendency of firms, and
servitization depth has a greater effect on the export of firms than
servitization breadth; second, market power enhances the solvency of fixed
costs and variable costs faced by the export of firms and promotes the marginal
effect of servitization on the export of
firms by influencing the corporate service business strategy; third,
servitization significantly improves the export tendency of the products
characterized by a higher level of product support servitization and
digitization but a lower international market threshold; fourth, the
technology spillover effect and scope economy effect caused by servitization promote
the export of firms while the crowding-out effect and sunk cost effect inhibit the
export of firms. The above findings provide both theoretical support and
empirical basis for rooting out the dilemma of export from the research
perspective of manufacturing firm servitization.