The Relationships Between China's Value-chain Tradeand Partner Countries' Business Cycle Linkage

During economic globalization,the division of global value chain has become the new norm of globalization of production.At the same time,the relationships between countries around the world are becoming much closer,and the degree of dependence on trade,finance etc.has been improved soundly.All the countries will be influenced inevitably by other countries' economic behavior.Whether the value-chain trade will affect the economic linkage between countries or not becomes the focus of this paper.Based on the previous research,the paper finds that the value-chain trade influences economic cycle linkage in two ways-direct and indirect ways.The former is that value-chain trade directly affects the economic cycle comovement between countries,the latter is that value-chain trade affects total factor productivity(TFP)linkage of countries,thus influencing the economic cycle comovement between countries.According to the definition of value-chain trade and economic cycle linkage,this paper uses the imported intermediate to represent value-chain trade in theoretical analysis,and uses the linkage of output to indicate economic cycle linkage respectively.Then,the paper uses Cobb-Douglas production function to analyze the effect of imported intermediate goods on output linkage(direct approach)and treat TFP linkage as intermediate variable,then study the effect of imports of intermediate goods on it.Finally,the paper cares about the relationships between TFP linkage and output comovement.According to the theoretical model,the following research is limited to China and its partner countries.Subsequently,building indicators in the part of empirical analysis.To reduce the endogeneity of empirical analysis,the paper puts three fixed effects into the regression equation,and the main conclusions are as follows:First,direct approach.?After introducing value-chain trade,the stronger bilateral trade intensity and value-chain trade intensity,the stronger business cycle linkage between two countries;?Value-chain trade will further enlarge the impact of bilateral trade intensity on business cycle linkage,and will have an additional role in the economic cycle linkage;?Intra-industry trade cannot increase the business cycle linkage of the two countries,and only the value-chain trade within the industry can promote the enhancement of economic cycle linkage;?Intra-industry value-chain trade between China and developed countries plays a more important role in promoting business cycle linkage than that between China and developing countries.Second,indirect approach.?After introducing value-chain trade,the stronger bilateral trade intensity and value-chain trade intensity,the stronger TFP linkage between two countries;?Value-chain trade will further enlarge the impact of bilateral trade intensity on TFP linkage,and will have an additional role in the economic cycle linkage;? After controlling intra-industry trade,value-chain trade has an "additional" effect on TFP linkage between the two countries;?China and developing countries are more sympathetic TFP linkage than developed countries;?There is a significant positive relationship between TFP linkage and economic cycle linkage between China and its trading partners.Finally,based on the conclusions obtained,this paper provides some reference for China's participation in the global value chain and for how to promote China's position in the GVC.