Contract Execution Efficiency,Financial Development And Corporate International Choice Of Vertical Specialization Organization Mode

As a new form of production globalization,international vertical specialization is also mainly driven by multinational companies.There are mainly two modes of multinational companies' arrangements for international vertical specialization: offshore migration within enterprises and offshore outsourcing between enterprises.When conducting industry analysis,offshore outsourcing between enterprises and offshore outsourcing within enterprises constitute international outsourcing,and there is no significant difference between the two.When introducing the theory of industrial organization to analyze the organization model selection of international vertical specialization of enterprises,international outsourcing is defined as offshore outsourcing between non-affiliated enterprises,and international vertical specialization between related enterprises is regarded as offshore offshore shift.In industry analysis,the scope of outsourcing is larger than the scope of enterprise analysis.Offshore migration within an enterprise refers to a form of division of labor in which a multinational company hands over the production of intermediate products or a part of the production process to a foreign subsidiary,and the multinational company completes the final product production,Offshore migration within an enterprise is an integrated form of international vertical specialization;Offshore outsourcing between enterprises refers to a form of division of labor that is completed by a non-affiliated company in the form of a contract signed by a multinational company in the production of intermediate products or in the production process,Offshoring between enterprises is a non-integrated form of international vertical specialization.After referencing and summarizing previous theories and empirical articles,this paper establishes econometric models from the corporate level and the regional level,taking the company's international vertical professional organization model as the explained variable,and taking the contract execution efficiency and regional financial development as the explanation Variables,got more detailed results than previous articles.Based on the theory of incomplete contracts,this paper uses the 2005 World Bank 's micro-investigation data to study the impact of contract execution efficiency and financial development on the selection of international vertical professional organization models.The results of this study show that in areas with higher contract execution efficiency,companies are more likely to undertake multinational company production through outsourcing to embed in global value chains.On the contrary,companies are more likely to undertake multinational company production in the form of vertical integration.In addition,the efficiency of contract execution has a strong regional effect on the choice of vertical professional organization model,and the effect in the eastern region is more significant.The degree of regional financial development is inversely related to the pattern of international vertical professional organization of enterprises.That is,the higher the degree of regional financial development,the more likely regional enterprises are to undertake the production of multinational companies in the form of outsourcing.After controlling for other variables such as regions and industries and solving endogenous problems,the regression results are still robust.In addition to contract execution efficiency and regional financial development,the choice of the international vertical professional organization model of an enterprise is also affected by factors such as the age of the enterprise,human capital,and investment in R & D.