Study Of The Impact Of OFDI On Dynamic Upgrading Of China's Comparative Advantage

At present,the global economy is in a midst of the historical changing stage with sluggish recovery and adjustment of differentiation.Besides that,the reshaping of global economic territory,the rise of trade protectionism and regional political turmoil have aggravated the uncertainty of global economic development.When it comes to China's economy,faced with a series of problems,such as endogenous power shortage,structurally excessive capacity and quite low status of international division of labor and so on,China's economic growth slowed down and has come into the critical period of economic restructuring,transformation and upgrading.Under such complicated and changeable international economic situation,it is of great significance to study how to upgrade the comparative advantage and promote the optimization of the industrial structure and the promotion of the international division of labor.Currently the research on comparative advantage mainly focuses on explaining the source of comparative advantage from the aspects of technological progress,economies of scale,factor endowment and division of specialization and so on.With the development of economic globalization,and the international division of labor deepening into the division of the global value chain,OFDI is an important way for China to participate in the international division of labor to enhance the comparative advantage.Up till now there are few studies on the relationship between OFDI and comparative advantage.In this paper,the OFDI and dynamic upgrading of comparative advantage are included in the same analytical framework from the perspective of global value chain division of labor so as to explore the relationship between them,which makes this researching innovative.First of all,based on the relevant literature and theories,the current situation of China's foreign investment and the division of the global value chain have been analyzed in order to explore the law of OFDI and the dynamic development of comparative advantage.Besides that,the mechanism how OFDI affects the dynamic upgrading of comparative advantage from the perspective of value chain division has also been researched and this affecting mechanism can be summarized as three effects.Firstly,the scale effect.China's enterprises carry out OFDI to transfer the downstream value-added links of products to foreign countries,and then to take advantage of the host country's technology,market and other strategic resources to expand the scale of production in order to achieve economies of scale.Secondly,the structural effect.Multinational companies make industry transfer in order to provide space for stepping into high-end links of value chain,and reconfigure production factors to promote industrial structure supererogation through the OFDI so as to achieve industrial upgrading and export structure optimization.Thirdly,the technical effect.Under different“driving force”of value chain,companies have varied ways and paths to achieve reversed overflow of technology through conducting OFDI.In the producer-driven value chain,multinational corporations adopt OFDI to get into capital technology-intensive industrial clusters of the developed countries in order to obtain their high-end technology through the competitive effect,demand-oriented market,personnel mobility and other ways and so on.While in the buyer-driven global value chain,multinational corporations mainly conduct OFDI to achieve cross-border mergers and acquisitions of foreign companies,and then to obtain their technology,R&D resources,sales channels and other strategic resources to gain comparative advantage upgrade.Secondly,from the point of view of trade value-added accounting,taking the manufacturing industry as the research object,the indexes of export value-added,industry optimization(EO index)and GVC Position index are used to separately represent the impact of OFDI on the scale effect,structural effect and technical effect of comparative advantage upgrading.Based on the trade value-added accounting method of Wang Zhi in 2015,this paper makes use of the WIOD database 1995-2014 China's manufacturing input-output data to measure the export value-added of China's manufacturing industry,EO index of industrial export optimization and the GVC Position index,and then those three effects are experimentally tested by using improved trade gravity model and the time series model.The test result shows Chinese enterprises can effectively expand the scale of production to form the scale effect through conducting OFDI so as to then provide the development space for entering into high-end links of value chain to form the structural effect,and at last to gain high-end technology from developed countries to form technical effect.All these three effects contribute to the dynamic upgrading of comparative advantage and the upgrading in global value chain.Finally,on the basis of theoretical analysis and empirical test results,policy recommendations on the promoting China's dynamic upgrading of comparative advantage have also been put forward regarding to how government can provide convenient ways for enterprise to“go out”,and how enterprise can cultivate their own competitiveness through investment,talent,strategy and market so on.