Study On The Impact Of Vertical Specialization On Technology Innovation Of China’s Manufacturing Industry

Since the 1990s, as a special model of production and trade, vertical specialization has got a high speed development and has a significant influence on the economy of countries around the world. The international division of labor no longer just simply stay within inter-industry or intra-industry division of labor, but further refine into more micro intra-product division of labor. The production is divided into several continuous links or processes, and each link (process) is arranged to different country or region to produce. Under the circumstance of further refinement of the international division of labor, with the comparative advantage of labor and resources, China’s manufacturing industry successfully gets into the system of global vertical specialization, receives the processes or links of low added value and low technical content transferred out by developed countries for reducing the production costs and keeping competitive advantages. There is no denying that taking an active part in the vertical specialization production, has brought a certain economic benefits and promoted the development of processing trade of our country’s manufacturing industry.However, the situation of China’s manufacturing industry has been at the low technical content of processing organization production for a long time will persist or even get worse. For this reason, manufacturing industry in our country should make full use of various resources strengthen technological innovation, and realize the transfer to the high-tech of the chain.The first part mainly elaborates the background and significance of this paper, and reviews the correlative literatures about vertical specialization、technical innovation and the impact of the former on the latter both at home and abroad; The second chapter firstly mathematically analyses the technology spillover in the process of vertical specialization and then theoretically analyses the technology spillover how to affect on the technical innovation. The third part choosing 12 manufacturing industries of China from 1997 to 2010, using the selected vertical specialization index and the data of patent application to measure the degree of vertical specialization and the level of technology innovation, analyses the status quo. The fourth part is the empirical part of this article.Firstly, we establish a fundamental model. Due to the technological innovation is a long-term process, having obvious cumulative effect:the level of technological innovation of past will have significant effect on the ability of technological innovation of right now, so we introduce the first-order lag of the number of patent application into the model, and extend it to be a dynamic panel data model. Then using generalized GMM to regress the model, and further divide the 12 manufacturing industries into labor and resource intensive industry、low technology industry and high technology industry, then respectively measure estimation. Finally, through the empirical analysis coming to a conclusion:in general, taking part in vertical specialization can promote the technology innovation of China’s manufacturing industry. Specific to the three different types of industries, the vertical specialization can also promote their technology innovation in different degrees. Chapter five summarized the above research, and according to the conclusion and the reality of China put forward the corresponding suggestions:reasonable furthering the degree of involved in the manufacture of vertical specialization, enhancing the absorptive capacity of technology spillover in vertical specialization, strengthening the communication with multinational company to further strengthen its technology spillover effects on domestic technology innovation, the enterprises of participating in vertical specialization should focus on the R&D of key technologies and promoting nuclear business and reverse outsourcing strategy, combining independent R&D with digesting and absorbing the technology spillovers, expanding the scale of the enterprise average scale, industry investment and the industrial added value rate, further promoting the development of technology innovation.