Productivity linkages between services and manufacturing: Firm-level evidence from developing countries

This paper uses firm-level data from 119 developing countries to show that services sector productivity is positively associated with manufacturing productivity. Moreover, the link between productivity in services and manufacturing is particularly strong for manufacturing firms that are more intensive in their use of services inputs. At the mean level of services input use in the dataset, a 10% improvement in services productivity is associated with a 0.6% improvement in manufacturing productivity.