Research On Financial Development And Global Value Chain Upgrading

Global Value Chain theory reveals the dynamic characteristics of the global industry, and find out who created and distributed the value. What’s more, providing a new perspective for the study of a country or region to upgrade the value chain. On the one hand, the level of value chain presents the technical level of the industry, on the other hand, financial development is an important guarantee for technological innovation and the industry value chain’s upgrading. Acutely, the lagging of financial development has become a constraint to the industry value chain’s upgrading. From the perspective of regional financial development, this paper measures the value chain position with export sophistication to study the path that financial development influenced the industry value chain upgrading.This paper measured the export sophistication of the high-tech industry, which reflects the productivity and technological level in global competition and international division of labor. The more complex the product technology is, the more varieties the middle products needed. In the international division of labor of the global production network, the R&D and producing of heterogeneity products must be at the core status. It is important to accumulate R&D capital and human capital with a high R&D efficiency, when comes to develop the intermediate products. As the difficulty in developing intermediate products, we face greater uncertainty and risk. Developed financial system and mature local financial markets effectively alleviate the problem in the heterogeneity intermediate products’ development and production, and promote this areas to produce products of higher technical sophistication, finally occupy the central position in the value chain. From the perspective of financial development, this paper proposes three paths of the financial development’s influence on value chain upgrading: Firstly, financial development can directly affect the value chain’s upgrading; Secondly, the financial development affect the value chain upgrading by promoting the accumulation of the R&D capital and human capital; Thirdly, the regional market can strengthen the promoting effect of financial development on the value chain upgrading.This paper uses theoretical and empirical models to verify the above three impact paths. In theory test: Firstly, based on analyzing the status of the Yangtze River Delta’s financial development and high-tech industry value chain upgrading, it comes to the preliminary judgment that financial development can directly affect the status of the value chain; Secondly, building the Cobb-Douglas production function model to analyze the micro-mechanism of financial development on promoting R&D capital and human capital’s accumulation, and using the "cost discovery model" analyzes the industry productivity. Then explore the impact of R&D and human capital on value chain upgrading; finally, based on the Dixit-Stiglitz monopolistic competition model to analyze the production and export behavior of heterogeneity enterprises, and introduces the "Adjustment Costs" concept to analyze the impact of financial development and regional market on the value chain upgrading. In empirical aspect : Firstly, according to the theoretical analysis of the three paths to build econometric models, and using the high-tech industry panel data from 2000 to 2013 in Yangtze River Delta with feasible generalized least squares(FGLS) and 2SLS, LIML, two-step GMM, iterative GMM instrumental method to make empirical test. Finally, based on the above theoretical and empirical test, this paper makes proposals on financial development promoting the value chain upgrading.