| A notable feature of today’s world economy is the extensive development of global value chains(GVCs).Different countries carry out coordinated production on a global scale and actively participate in the cooperation and competition of GVCs.However,in recent years the development of multilateral trade mechanism has stagnated,while regional trade integration represented by free trade areas(FTAs)has greatly accelerated.Regional economic integration is playing an increasingly important role in the broadening and deepening of GVCs and has exerted a significant influence on international division of labor and the pattern of international trade.Facing the major changes in world economy unseen in a century,China’s economy has come to a critical period of transformation.We should be more active in implementing the opening up strategy to build a new open economic system.And by making full use of regional economic integration,we can promote Chinese firms to better integrate into GVC trade and labor-division system and improve their position and profitability during participation in GVCs.Taking CAFTA as the research object,this paper focuses on the theoretical and empirical analysis of how regional economic integration affects Chinese firms’ participation in GVCs.Drawing on the researches of predecessors,the possible contribution of this paper lies in the following aspects.First,this paper focuses on the interconnection between regional economic integration and GVCs and analyzes the driving factors of participation in GVCs from the perspective of integrated market constructed by regional economic integration.Second,different from previous studies on regional economic integration,this paper places emphasis on the micro perspective under regional economic integration.It mainly discusses the actucal impact of CAFTA on firms’ participation in GVCs and drills down the possible action paths of FTA to affect firms DVAR in exports from themicro mechanism.Thirdly,this paper conducts empirical tests on the impact and mechanisms of regional economic integration on firm’s DVAR in exports based on firm heterogeneity.In terms of theoretical analysis,this paper proposes that through institutional arrangement,CAFTA can promote the integration process of regional market.By forming a relatively stable large regional market and improving its operation efficiency,CAFTA will make impacts on the ways in which firms participate in GVCs and the level of returns during participation.Based on firm’s DVAR in exports,a local equilibrium model under the framework of FTA is established.It finds that the improvement of regional market environment can affect the profit function of a firm from trade cost,market demand and many other aspects,resulting in the change of firms’ DVAR in exports.It further notices that the impact of CAFTA on firms’ participation in GVCs varies with firm heterogeneity.By promoting regional trade,CAFTA can improve firms’ dynamic status in international trade in specific ways(including expanding regional trade scale,promoting the transformation of trade pattern,and extending the duration of trade relationships,etc.)to drive firms to integrate into GVCs on a broader and deeper level.On the basis of theoretical analysis,empirical tests are carried out by the great length of this paper.Using data of Chinese firms from the Chinese Customs and the Chinese Annual Survey of Industrial Firms in the period of 2000 to 2013,this paper established a panel data regression model with DVAR in exports as the main index to measure firms’ participation in the GVCs to test the impact and specific action paths of CAFTA on Chinese firms’ participation in GVCs from different aspects.The conclusions can be summarized as followings:(1)CAFTA has made a significant positive impact on the increase of Chinese firms’ DVAR in exports and has effectively promoted the returns of Chinese firms participating in GVCs.Factual characteristics revealed by sample data suggest that since the establishment of CAFTA,the returns of Chinese firms participating in GVCs have been increasing continuously,especially firms in coastal areas,in labor and capital-intensive industries,of processing and mixed trade patterns,and by foreign-investment regime have seen a rapid increase in the DVAR in exports.Using the difference-indifference method to carry out empirical tests,results indicate that there is a significant positive correlation between CAFTA and Chinese firms’ DVAR in exports.(2)Under the framework of CAFTA,trade scale with ASEAN countries of Chinese firms keeps expanding and the expansion of regional trade scale significantly promotes Chinese firms’ DVAR in exports to increase,of which the expansion of firms’ export scale to ASEAN countries is the important driving force for the growth of DVAR in exports,while the expansion of import scale from ASEAN countries has a certain inhibitory effect on firms’ DVAR in exports.The expansion effect of intra-regional trade brought by CAFTA has a prominent positive impact on the actual profits of Chinese firms participating in GVCs.(3)Under the framework of CAFTA,the transformation process of trade pattern is evidently faster in Chinese firms with direct trade linkages to ASEAN countries.The increase in proportion of ordinary trade in total exports has a notable positive impact on the growth of firms’ DVAR in exports,and the pulling effect is especially remarkable in Chinese firms with direct trade linkages to ASEAN countries.The transformation effect of trade pattern brought by CAFTA provides an important driving force for Chinese firms to improve the current position and actual profits during participation in GVCs.(4)Under the framework of CAFTA,Chinese firms with direct trade linkages to ASEAN countries have higher survival probability and longer duration of trade relationships in the international market,and the extension of duration of trade relationships is obviously conducive to the increase of firms’ DVAR in exports.The extension effect of trade duration brought byCAFTA has improved the breadth and depth of Chinese firms’ participation in GVCs at an intensive margin. |
