The Role of KIBs for Territorial Servitization: Evidence from Germany and Spain

Abstract

Servitization requires an organizational effort for continuous transformation, since manufacturers move from selling goods to selling an integrated combination of products and services business. In this context, partnership with Knowledge-Intensive Business Service (KIBS) can enable the process of value appropriation sustained on the new services business generated. This study seeks to explain the role of KIBS in fostering territorial servitization within two European regions, Germany and Spain. In doing so, regional measures selected through the appropriate NUTS-2 code allowed us to develop a panel data comprising 285 region-year observations. From this panel data, territorial servitization was convening using two stages least squares estimators, and determined as the number of servitizing manufacturers over total manufacturers in a specific region and year. Results uncover critical measures that determine territorial servitization, KIBS deepening –a density variablemeasurint the number of KIBS over total firms in a specific region and year, exposure to trade–measured through the number of freights, and accumulated knowledge –measured through the number of patents are closely related to territorial servitization. This study contributes to understand the territorial impact of servitization throughout the mutually dependent collaborations between manufacturing firms and KIBS.