Acquisition Or Greenfield Start-up For Chinese Manufacturing Enterprises

At present,the global value chain(GVC)is a major feature of the global economy.Its new form of division of labor-global value division of labor,makes the production process splitting into many segments of modular process which is distributed around the world.It involving countries which have different elements of endowment into the global production system.For a long time,Chinese enterprises,especially the manufacturing enterprises,generally participating the international division of labor in the section of low value-added,it has been keeping stay at the controlled and captured status in the international division of labor system.However,in order to change this situation,the manufacturing enterprises actively "go abroad".Through the direct participation by foreign direct investing Chinese enterprises have made remarkable achievements in the process of gradually incorporating into the GVC.Therefore,this paper intends to study the foreign direct investment of manufacturing enterprises by combining the choice of foreign direct investment model and the GVC.It will of great significance to us to improve the international status of enterprises and to achieve independent innovation and industrial transformation and upgrading.This paper focuses on the enterprises' behaviors of the choice of foreign direct investment mode from the perspective of enhancing the value of the division of labor of the value chain.The paper first elaborates the status of the division of labor of Chinese manufacturing enterprises under the GVC.According to the density of R&D,the upstream and downstream manufacturing industries are divided into high technology industry,medium and high technology industry,medium and low technology industry,and low technology industry.The industries are quantified with TC index,RCI index and GVC index.Then,using the GVC theory to analyze the influence of foreign investment mode of Chinese manufacturing enterprises on the status of global value division of labor.This paper puts forward the basic assumptions of the choice of foreign investment mode and the influence of investment pattern on the division of labor status,and carries on the empirical analysis.From the step by step analysis of Chinese manufacturing enterprises,this paper intend to answer the current status of the international division of labor,why different parts of the manufacturing enterprises invest,how to invest,whether the current foreign direct investment mode help to enhance the status of global value division of labor.And for different types of manufacturing industry,make some recommendations about adjusting the foreign direct investment mode for Chinese government and enterprises from the perspective of the status of global value division of labor,and provide theoretical guidance to other related industries.The basic conclusions are as follows:First,according to the analysis of the status quo of manufacturing enterprises' division.of labor,it is concluded that the overall competitiveness of Chinese manufacturing industry and the status of global value division of labor still need to be improved.Second,by using the theory of GVC and foreign investment to analyze Chinese manufacturing enterprises' choice of the mode of foreign investment,what can be found is that there are two main driving force when the manufacturing enterprises using foreign investment to improve the status of global value division of labor,the enterprise should be based on the two drive mechanism to select the corresponding foreign investment mode.The upstream enterprise is generally a producer-driven,the activities of overseas investment is mainly to obtain or maintain technical advantages,it is suitable to use the mode of greenfield investment.The downstream enterprise is generally buyer-driven,they generally want to expand overseas,sales channels,it is suitable to use the mode of cross-border M&A investment.Thirdly,we use the empirical method to analyze the current tendency of Chinese manufacturing enterprises'choice of the mode of foreign investment and the influence of this tendency on the improvement of global value division of labor.The results show that enterprises located in the upper reaches of the division of labor tend to adopt cross-border mergers and acquisitions,but this investment model is not conducive to enhance the status of global value division of labor,the lower reaches of enterprises adopt more greenfield investment,but the empirical results indicating that the use of cross-border M&A investment can significantly enhance the division of labor status.In a word,it is necessary for the future structural transformation and globalization of the manufacturing industry to examine the investment model of Chinese manufacturing enterprises from the another new perspective-the status of global value division of labor.If Chinese manufacturing enterprises want to further improve the international competitiveness,they need choose the appropriate way of foreign investment.The upstream enterprises should adopt the new investment model,and the cross-border M&A investment are suitable for the downstream enterprises.Due to the limited data and space,this paper does not consider another factors that affect the choice of investment mode and the status of international division of labor.The following studies will expected to analyze these factors in order to further explore the influence of different selections of investment mode on the status of global value division of labor.