Uncovering Productivity Gains of Digital and Green Servitization: Implications from the Automotive Industry

Abstract

Abstract:The growing industrial concern about sustainability challenges has driven vehicle and auto parts manufacturers to adopt service capabilities as a way to maintain competitiveness in compliance with environmental regulations. As a result, automakers have progressively integrated digital and green service initiatives to support operations and address environmental issues effectively. The present study examined the effect of digital and green servitization on the firm's productivity. To test their effect quantitatively, this study used the ORBIS database to construct a multi-country sample containing 228 companies in the automotive industry. Our findings indicate that implementation of digital and green servitization is positively associated with higher productivity outcomes once the two forms of servitization coexist and operate jointly. Moreover, the results of the study underscore the importance of establishing a successional pathway of implementation priorities. Our evidence suggests that firms willing to offer green services should consider offering digital services first, as this is the only way to obtain productivity gains from green servitization.

Product-service innovation and performance: unveiling the complexities

“…More concretely, Figure 2 summarizes the various relationships that can be observed between PSI and performance. Exhibit (2a) shows a positive and linear relationship between these variables (Belvedere et al, 2013: Bustinza et al, 2015Crozet and Millet, 2017;Opazo et al, 2018;Szász et al, 2017), which points to an equally proportionate effect of service sales on performance, regardless the business' current service sales. One way of relaxing this assumption is to test for the presence of decreasing returns to PSI.…”

“…Interestingly, service intensity was measured through manufacturing industry codes. This methodological approach to measure PSI by industry codes has been used in recent work, including Gomes et al (2018) who study the capacity of regions to servitize, Opazo et al (2018) who analyze Digital and Green servitization, Crozet and Milet (2017) who evaluate industry heterogeneity and the positive effect of servitization in profitability, employment and total sales, and Szász et al (2017) who found a linear relationship between PSI and performance with service provision acting as moderator.…”

Reviewing Literature on Digitalization, Business Model Innovation, and Sustainable Industry: Past Achievements and Future Promises

“…The study by Opazo-Basáez et al [61] in this special issue examines the effect of digital and green servitization on the firm's productivity. The findings show that implementation of digital and green servitization is positively associated with higher productivity outcomes, once these two forms of servitization are made to coexist and operate jointly.…”

Digitalization and the inception of concentric strategic alliances: A case study in the retailing sector

“…Digitalization is seen as one of the most significant on‐going technological trends faced globally (Hagberg, Sundstrom, & Egels‐Zandén, ). In business settings, it refers to the use of technological advancements to improve customer experience and operational processes, providing the opportunity to create new business models (Fitzgerald, Kruschwitz, Bonnet, & Welch, ; Opazo‐Basáez, Vendrell‐Herrero, & Bustinza, ) through the integration of people, systems companies, products, and services (Hsu, ; Vendrell‐Herrero, Bustinza, Parry, & Georgantzis, ). Through digitalization, companies are able to obtain better visibility for their operations (Yamamoto, ).…”