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Servitization strategy is becoming increasingly recognized as a key source of value with important competitive and economic implications across the globe. It has been proven to contribute to territorial performance through the provision of services to manufacturing businesses. However, this contribution has largely been the consequence of the configuration of local industrial structures, and most importantly, of the interconnectedness between manufacturing firms and knowledge-intensive business service (KIBS) firms. Hence, the process of territorial servitization is highly conditioned by the association between manufacturing businesses and KIBS firms. To date, the literature on territorial servitization has mostly described the implications of KIBS firms for service deployment and service innovation in manufacturing, with knowledge and technological capabilities being considered the main variables in its success. Nevertheless, the literature is silent on how the geographical distance between KIBS firms and manufacturing companies may affect servitization capacity. This paper aims to raise the importance of the geographical distance of KIBS firms in manufacturers’ servitization capacity. To meet this aim, an analysis of two manufacturing companies; Alpha and Beta, is provided. They are both located in the Basque country but collaborate with KIBS firms located in different geographical areas, either “inside” or “outside” the Basque region. Through a qualitative study based on (i) measuring these firms’ capacity for servitization, and (ii) in-depth interviews, results suggest that geographical distance plays a key role in the KIBS firm-Manufacturer relationship for servitization capacity purposes, and should be regards as an important aspect for successful territorial servitization., La estrategia de servitización está siendo progresivamente reconocida a lo largo del mundo como una fuente clave de valor con importantes implicaciones competitivas y económicas. Se ha demostrado, entre otras cosas, que contribuye al desempeño territorial mediante la prestación de servicios a empresas manufactureras. No obstante, esta contribución se debe en gran parte a la configuración de las estructuras industriales locales, y lo que es más importante, a la interconexión entre empresas manufactureras y empresas de servicios empresariales intensivos en conocimiento (KIBS). En consecuencia, el proceso de servitización territorial está muy condicionado por la asociación entre empresas manufactureras y empresas KIBS. Hasta la fecha, la literatura sobre servitización territorial ha descrito principalmente las implicaciones de las empresas KIBS en el despliegue de servicios y la innovación de servicios en la manufactura, considerando el conocimiento y las capacidades tecnológicas las principales variables de su éxito. Sin embargo, la literatura es escasa o casi inexistente respecto de cómo la distancia geográfica entre las empresas KIBS y las empresas manufactureras puede afectar la capacidad de servitización. Por consiguiente, este documento tiene como objetivo plantear la importancia de la distancia geográfica de las empresas KIBS en la capacidad de servitización de los fabricantes. Para cumplir con este objetivo, proporciona el análisis de dos empresas manufactureras; Alfa y Beta. Ambas situadas en el País Vasco, pero en colaboración con firmas KIBS ubicadas en diferentes áreas geográficas, ya sea “dentro” o “fuera” del País Vasco. A través de un estudio cualitativo basado en (i) medir la capacidad de servitización de estas empresas y (ii) entrevistas en profundidad, los resultados sugieren que la distancia geográfica juega un papel clave en la relación empresa KIBS y la capacidad de servitización del fabricante, y debería ser considerada como un aspecto importante

The purpose of this paper is to unveil the existing complexities in the relationship between product-service innovation (PSI) - or servitisation - and firm performance that arise from the mismatch between theoretical predictions and empirical evidence. Whilst theoretical work suggests that there are a number of advantages for implementing PSI, quantitative firm-level evidence is not conclusive about the positive effects of this type of innovation on firm performance. By reviewing the relevant publications dealing with the PSI-performance relationship, their methodological approach, the novel constructs validated and the role of mediators/moderators found in the servitisation literature, we argue that further contextualisation is needed to solve this puzzle. Additionally, this work systematically organises the different methods and variables used to assess the PSI-performance link, guiding scholars on the choice between different methods and measures. This work enumerates various streams of future research to discover unexplored fields to better ground this relationship, including the development of solid configurational theories, appropriate fit between theory and measurement techniques and new sampling strategies for performing longitudinal studies., Peer Reviewed, Preprint