Reverse Outsourcing And Industry Development Of Automobile Industry

Outsourcing was seen as traditionally developed-country-firms dominated games, but in practice there has been a rise to a new form of outsourcing-reverse outsourcing, namely low-labor-costs enterprises in developing countries, in turn, as active contracting out parties. At this stage, a lot of manufacturing companies achieve the technological progress and development of enterprises by conducting reverse outsourcing and thereby promote industrial upgrading. The reverse outsourcing as a new phenomenon, has not caused widespread concern in academic studies. The existing research on the reverse outsourcing is limited, even more scarce on industrial upgrading, which has important theoretical and practical significance of reverse outsourcing industry itself and exploring the impact of the upgrade. Value chain rents are mainly used to study income distribution of global value chains in various functional aspects. Reverse outsourcing as an international division of labor, it is an important part of the global value chain. Therefore, in order to study the perspective of the value chain rents reverse outsourcing, analyzing its origin and rent reveals important influence on industrial upgrading for further analysis of reverse outsourcing. In this paper, the rental value chain perspective of reverse outsourcing research contains China’s automobile industry value chain rents process and its impact on the industrial upgrading.First, with literature review, the author reviews on the basis of previous studies the related reverse outsourcing, value chain rents research and industrial upgrading, to initiate conceptual ideas for this paper. Then, the theoretical analysis of this paper is divided into three sections, the first of which provides a theoretical model of reverse outsourcing, giving the condition of reverse outsourcing generated; the second section analyzes the influencing factors of reverse outsourcing to obtain the rent of value chain; the third sections explores the relationship of the reverse outsourcing, value chain rents and industrial upgrading. After that, a situation analysis is divided into two sections, the first section analyzes the development of China’s automobile industry; the second section was the current situation of China’s automobile industry on reverse outsourcing and Chang’an Automobile has been the case for the reverse outsourcing and the development of automobile-related inferences. The next part of the article is the empirical analysis. This paper constructs the evaluated reverse outsourcing in China’s automobile industry to obtain an empirical model of the value chain rents capacity, with empirical results from 2007 to 2014. Finally, conclusions and suggestions of the article have produced conditions of reverse outsourcing, reverse outsourcing to promote industrial upgrading in three ways, by obtaining the value chain rents reverse outsourcing China’s automobile industry value chain to obtain rent ability to continuously enhance, including the strongest ability to obtain external value chain rents and weakest ability to obtain individual actors rent. Based on the research findings, the author put forward policy recommendations herein from both the government and enterprises perspectives.