The Influence Of OFDI On GVC Position Of China's Manufacturing Industry

With the rapid development of international division of labor,economic globalization is deepened and Global Value Chain emerge.In recent years,many multinational enterpriSes organized economic activities such as investment,mergers and acquisition among the world which accelerated the international flow of capital.And OFDI has gradually become an important way for countries to expand industries and seize world resources.As the cornerstone of China's industry,manufacturing industry is an important pillar of China's economic development.China's manufacturing industry has relied on the demographic dividend and the advantage of resources to undertake a large number of labor-intensive industrial production in the world for a long time.It is at the lower end of the Global Value Chain and tends to fall into the trap of "low-end locking" and "poverty growth".In this context,taking China's manufacturing industry as an example,it is of great significance to study the influence of OFDI on GVC position,which can improve China's OFDI efficiency,improve the GVC position of China's manufacturing industry,and promote the upgrading of industrial structure.This paper uses three methods including theoretical analysis,contrasting analysis and test analysis.First,by retrospecting and sorting out the previous literature,this paper summarizes the theory of Global Value Chain and the theory of OFDI of developing countries,and analyzes the influence of OFDI on the GVC position.lt holds that OFDI can promote the GVC position through the effect of strategic asset acquisition,marginal industry transferring and market internalization.But it may also restrain the GVC position through the effect of industry hollowing and barrier.Second,three methods of measuring the GVC position are summarized from the perspectives of value,technology and physical length,which are the GVC position indicator,the GVC_prody and the GVC location indicator respectively.Moreover,WIOD database,UIBE GVC Index database and World Bank database are further used to respectively calculate the GVC position and international ranking of China,s manufacturing industry from 2003 to 2014 according to the above three methods.By multi-angle analysis of the manufacturing industry of China to show its present situation and the international rank of GVC position.Then,the paper explores the influence of OFDI on the GVC position of China's manufacturing industry through empirical regression.Three different proxy variables which are the indicator of GVC position,GVC_prody and the GVC location are selected to represent the GVC position of China's manufacturing.According to the results,OFDI has a positive influence on the GVC position and the GVC_prody of China manufacturing industry,while it has a significant negative impact of the GVC location.By the view of Gao Xiang et al(2019)and Su Qingyi et al(2015),GVC location may inhibit the rate of value added.But OFDI can promote the domestic added value through the effect of the acquisition of strategic assets.Therefore,in the view of economic appreciation,OFDI can promote GVC position.At the same time,R&D intensity,human capital,industry capital stock and industry scale can promote the GVC position of manufacturing,while openness can inhibit it.In addition,the influence of OFDI on the GVC position of manufacturing industry at different technological levels is further investigated.And the results show that OFDI has a more significant effect on the GVC position of medium-tech and high-tech manufacturing industry than that of low-tech.Finally,this paper puts forward four policy suggestions on improving GVC position of China's manufacturing industry.First,steadily guide the rationalization of China's investment structure.Second,to promote China's deep participation in international investment.Third,attach importance to the cultivation of R&D and professional talents.Fourth,to vigorously promote intelligent manufacturing to drive industrial upgrading.There are two innovation in this Paper.On one hand,select three methods to measure the GVC position from the value,technology and physical length dimension,which are the GVC position indicators,GVC_prody and GVC location.Multi-angle and comprehensive analysis of the manufacturing industry can show more about its GVC position.On the other hand,in the process of studying the influence of OFDI on the GVC position of China's manufacturing industry,three different proxy variables which are the GVC position,GVC_prody and the GVC location are selected to represent the GVC position of China's manufacturing.In addition,the influence of OFDI on the GVC position of manufacturing industry at different technological levels is further investigated.