A Study On Fdi And Global Value Chains

With the further development of economic globalization, currently the international specialization has deepened into the global value chains specialization, which is based on the different value-added chains during production. Each country participates in one or more chains of the specialization system on the ground of their comparative advantages. China has become more open and been an important participant in the international economy since late 1970. What’s level of China’s participation in the GVCs specialization, by which means and how to upgrade the position during the opening economy background are the questions we must answer.According to the HIY methods, this study firstly calculates major countries’ GVC participation measured by vertical specialization share(VSS) based on WIOD database during 1995-2011, and makes a comparision with the GVC participation index by Koopman et al.(2010). Then it tests the causality between FDI and GVC participation of manufacture in China. At last, this study measures GVC upgrading by technological progress, it tests the influence of GVC participation,which is incured by FDI, on the rising of manufacture’s specialization position of China.The effect shows that China’s participation in the GVC specialization measured by two indices both achieve rapid rise, and the indices of manufacture are much higher than the average lever. It also finds that FDI inflow is the Granger causality of GVC participation rise. Lastly this study proves that the rise in GVC participation has positive influence on the advance of TFP in manufacture, while the effect differs from industrial features, and the inpact of inner innovation on technological progress is not significant.