The Relationship Between OFDI And Home Country's Global Value Chain

With the development of "fragmentation" and "processing trade" in international production and labor division in the current era,the concept of global value chain is becoming increasingly popular.Multinational companies play an increasingly important role in the global economy and trade.The boundaries of different companies and countries are getting more and more blurred.All of changes are brought about by global economic integration.As a result,in-depth discussion of global value chain has begun walking onto the stage.An important way to improve the status of the global value chain is foreign direct investment.The process of foreign direct investment is the process by which a country embeds its own production links into the global value chain.Since the "going out" strategy has been put forward China's foreign direct investment develops gradually,always reaching new heights.Foreign direct investment has an important impact on improving China's international status and has made an important contribution to China's rising status in the global value chain.What's more,with the proposing and implementation of "One Belt and One Road" policy and foundation of Asian Infrastructure Investment Bank,there's an objective requirement that we need to seize the opportunities in global value chain to help the country upgrade the overall economic strength.The existing research on the global value chain and outward foreign direct investment has been very rich,but the empirical study on the relationship between the two is still relatively small.Therefore,this article will focus on the in-depth internal relationship between the two from two different angles respectively,the national level and industry level.From the industry level,manufacturing is the most typical industry of outward foreign direct investment in the division of global value chain.Therefore,taking China's manufacturing industry as an example,the article analyzes the impact of different types of manufacturing industry of foreign direct investment on the status of the global value chain.This is also more practical and more instructive for making policy proposals to improve the global value chain by outward foreign direct investment.As for the structure of the article,the first chapter is the introduction,introducing the background of the article and the significance of the study.The second chapter is the literature review domestic and abroad.The third chapter talks about the theoretical transmission of outward foreign direct investment and global value chain.The fourth chapter is the empirical analysis of the influence of OFDI on the status of home country's global value chain.In this chapter,the article firstly introduces the main methods of estimating the status of global value chain firstly,and secondly analyzes the global value chain status through the indexes,GVC_Position and GVC_Participation,in national level.Thirdly,the article does the empirical analysis of the relationship between foreign direct investment and global value chain within developed and emerging markets.The article found that foreign direct investment in emerging markets has more significant impact on the value chain status compared with the developed countries which the impact is non-linear,decline slightly and rise later,by using fixed effect model.Chapter 5 is based on 29 dis-aggregated classification of Chinese manufacturing industry which is divided into labor-intensive industries,capital-intensive industries and technology-intensive industries according to the different intensive level of human input,capital and technology.It is found through the empirical study that labor-intensive industries do not have a positive impact on the home equity chain status,while capital-intensive industries and technology-intensive industries do.The last chapter is conclusion and suggestion of the article.