Influencing Factors Of Manufacturing Upgrade In Zhejiang Province

Manufacturing is the main body of industry, and it is also the pillar of the national economy. It is critical for countries and regions who are at a key stage of the industrialization. It is the convergence point of the core competitiveness. For now how to upgrade the manufacturing industry well to get better positioning and Profitability on the global value chain is the focus of attention of many scholars. In the context and trends of globalization, Zhejiang Province as a typical microcosm of advanced manufacturing provinces in China, what about its position on the global value chain? What are the main influencing factors? as well as how to further strengthen the positive factors and overcome the negative factors to resulting in effective upgrade on global value chains? It’s an important and urgent proposition. This paper adopts the approach of Combining theoretical analysis and empirical analysis. The existing theories as international division of labor theory, global value chain theory and industrial upgrading theory are its theoretical base. It depth the factors which affect the manufacturing upgrade in Zhejiang Province evidence-based on VAR model.This paper describes the development process of the manufacturing industry in Zhejiang Province at first. Then starting from the perspective of the global value chain, it describes and analyzes current situation of manufacturing in Zhejiang Province from three aspects of R&D,manufacturing and marketing services respectively on the basis of large amounts of data collected.Finally, it overall judgments that manufacturing in Zhejiang Province is wandering at low levels of the global value currently. It summarizes and analyzes the main factors of manufacturing upgrade in Zhejiang Province on the Global Value Chain: technical capability, advanced human capital,productive service industry, enterprise scale, industry clusters and system innovation based on the status quo above. It empirical researches the dynamic relationship between manufacturing upgrade in Zhejiang Province and its influencing factors by using data from year 1993 to 2012. It’s based on VAR dynamic system model and joints Granger causality test, impulse response functions,variance decomposition and other measurement tools. Empirical results show that: the influence produced by enterprise scale and advanced human capital is not significant. Technological innovation has made some impact effect, but its significant and persistent did not achieve the desired level. Producer services and system innovation has relatively stable positive stimulus and has a sustained effect.Based on the results of the analysis of these influencing factors, This paper made corresponding suggestions of the manufacturing upgrade in Zhejiang Province in following five aspects respectively: promoting the ability of the technological innovation and application acceleration, accelerating accumulation of senior human capital, completing the construction of service platform, strengthen Enterprises their own strength, increase policy support and the effectiveness. I’m looking forward that the analysis in this paper brings a little help to manufacturing upgrade in Zhejiang Province, and also expect to produce certain significance to manufacturing upgrade in other provinces and the development of related industries.