Does the Servitization Strategy Improve the Performance of Manufacturing Enterprises in China?

Lianxing Min¹, Jianqiong Wang^1*, Qian Luo²

¹School of Economics and Management, Southwest Jiaotong University, Chengdu, China.
²Bureau of Finance, Government of Chengdu, Chengdu, China.

DOI: 10.4236/ajibm.2015.55030                

Abstract

There is a controversy of the relationship between servitization of manufacturing and business performance in the literature. Based on the data of Hu-Shen A-share listed manufacturing enterprises in 2013, this paper examined the relationship in the above with the traditional servitization level variable(SERL) and the servitization decision variable(SERD), which was generated in a dynamic perspective of strategic decision, to measure the servitization strategy. The empirical results showed that the servitization decision was positively correlated with the market performance (Tobin’s q), and the servitization level was negatively correlated with the financial performance, including return on assets (ROA), economic value added change rate (EVAC) and earnings per share (EPS). Further, we discussed the results from the signal theory and diversification discount theory.

Keywords

Servitization, Business Performance, Strategic Transformation, Diversification, China

Conflicts of Interest

The authors declare no conflicts of interest.

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