Servitization and firm productivity premium across the product value chain: evidence from Russian manufacturing firms
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 19 January 2024
Abstract
Purpose
This paper aims to discuss the firm productivity premium for servitized firms. It discusses servitization across the product value chain and estimates the effects of the range and extent of servitization on productivity premium in manufacturing firms.
Design/methodology/approach
This paper develops a conceptual framework and tests the hypotheses on the effects of servitization on productivity premium using linear regression models with a sample of 20,837 Russian manufacturing firms gathered from the Ruslana Bureau van Dijk database and the Russian customs service.
Findings
Servitized firms exhibit higher total factor productivity and labor productivity. The labor productivity premium increases with the number of services offered. However, the impact of services on productivity varies along the product value chain: postmanufacturing and postsales services enhance productivity premium, while manufacturing and back-office services diminish them. The effect of establishment services remains ambiguous.
Practical implications
This paper offers an analytical framework for firms to assess their servitization strategies. These strategies should be gradual, focused on enhancing firm efficiency rather than being an end goal. Firms should initiate the process by introducing services at the postproduction and postsales stages of the product creation chain to achieve productivity premium.
Originality/value
The paper extends the evidence on firm-level productivity drivers and contributes to the servitization theory. A servitization strategy should be portfolio-based, considering both the potential gains and losses in productivity resulting from the implementation of specific services.
Keywords
Acknowledgements
This article is an output of a research project implemented as part of the Basic Research Program at the National Research University Higher School of Economics (HSE University).
Citation
Fedyunina, A., Ruzhanskaya, L., Gorodnyi, N. and Simachev, Y. (2024), "Servitization and firm productivity premium across the product value chain: evidence from Russian manufacturing firms", Journal of Business & Industrial Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBIM-07-2022-0338
Publisher
:Emerald Publishing Limited
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