Enterprise Upgrading In Technological Capabilities Perspective And The Context Of Global Value Chain

As economic globalization is growing in intensity, international division of labor based on value chain brings opportunities for enterprises in developing countries, but also formed a great challenge. Enterprises in developing countries that participate in the international division of labour according to comparative advantage provide a large number of growth opportunities, wherease may also be locked in lower profits by the leader in the global value chain. Therefore, enterprises in developing countries is facing the problem that how to charge from comparative advantage to competitive advantage in economic globalization context, in order to improve their competitive position in the international division of labour and obtain greater benefits. The theory of global value chain which gradually developed since 1990’s provides a better theoretical perspective and analytical framework to analysis and solute this problem, but the mechanism about enterprises in developing countries upgrade through global value chains and in the governance environment is still vague. The research of technological capability offers a useful analytical framework to understand and explain upgrading in the context of the global value chain. The subject of this dissertation is to study how enterprises in developing countries upgrade in the context of global value chain by the perspective of technological capability. And the destination of this dissertation is trying to have a new understand abour core concepts of global value chain and find new logical connection between them, and then discuss the upgrading strategic options of enterprises in developing countries from the technological capabilities perspective. In agriculture of China, vegetable industry is an important means of balancing international trade in agricultural products and important for agriculture and rural development in China, but there are many problems in developing. Thereforce, taking vegetable industry in China as a example and based on the theory of global value chain, this dissertation research how to enhance their international competitiveness and upgrading through integrate into the global economy. This dissertation is divided into eight chapters.Firstly, the writer brings forward the theoretical and practical perspective view of the problem. Among them, the question of theoretical perspective is:how enterprises in developing countries upgrade through global value chains and under governance leading by the enterprise of developed countries? The question of practical perspective is:how China’s vegetable industry should be integrated into the global economy to improve international competitiveness and achieve upgrade? And then point out the significance of the study and the basic structure. Methods that are used in this dissertation include logic methods, methods of evolutionary economics, individualism methodology, case study, interview, global value chain analysis methods.Secondly, based on a systematic review about literature of global value chains, the writer attribute the benefit which enterprises in developing countries integrated into the global value chains to providing an international source about technological capabilities. Few existing literature of global value chain covered the issue of the study about enterprise technical capability. Therefore, this chapter has a brief review about technological capability and proposes the main problems on the global value chain research based on the perspective of technological capability. Those should form a foundation of literatures for the research.Thirdly, based on the analysis of power, the writer analyze the nature of relation along with the global value chain and its impact on the rent, and then, analyze the nature of governance. This study is a foundation of the research about upgrading. This chapter discusses the source of power relations in global value chain firstly, classifies the power relations into three types, namely, market relationship, hybrid relationship and mix relationship. Subsequently, the writer discuss the form of rent and the distribution based on power relations, point out that upgrading of enterprises in developing countries should winn more rent based on power. After discussion about power and rent, the writer sum up the advance of GVC governance for three stages and viewpoints:governance as driving, governance as coordination and governance as normalization. These three viewpoints is complementary and competitive, but not iterative. And there still have not the tendency of integrating three viewpoints as a unification but disunited. Different logic and understanding of governance will come to a different classification and upgrading path. Finally, the relation between the global value chain governance and technology transfer capability is analyzed through characteristics of knowledge about technological capability.Fourthly, after analysizing the concept of upgrading, we point out that exisiting studies neglected technological capability behind upgrading, and should view upgrading as accumulative process of technological capability and acquisition different levels of ability gradually through a series of activities. The core of technological capability is innovation. Summarying the law about Evolution of technological capabilities in developing countries, we propse the upgrading way in context of global value chains and the learning process of technological capability, and analyze the relation between governance and upgrading by the perspective of technological capability. Then, this charpter analysize the basic tapies of entry barry, put forward strategies that acquire technological capability from global value chains and break through barriers. We point out that the heterogeneity of companies and long-term competitive advantage depends on the final construction of independent innovative capability. Finally, this chapter further analyzes how to embed the value chain in different countries use different links between the "capability of the potential energy gap" to get the different ability of enterprises to upgrade, and how to nurture demostic need in developing countries to form the independent innovation ability strategy.Fifthly, we begin the analysis how china’s vegetable industry upgrade in the context of global value chains. This chapter will focus on three issues:first, the basic characteristics of the world vegetable production and trade, the picture of global vegetable value chain; second, China’s vegetable industry situation and existing problems; third, overview of China’s vegetable exports and the main problems as the basis for subsequent empirical research. China’s vegetable industry has a rapaid development and an outstanding success, but some fundamental problems including the downward trend of export is still not resolved. Upgrading of China’s vegetable industrial is imperative.Sixthly, the international competitiveness of China’s vegetable industry is assessed by Empirical research methods, and analyze how China’s vegetable industry achieved upgrading in the context of global value chains by case study from the micro perspective. The evaluation about the international competitiveness of China’s vegetable industry includes two levels:first, using trade data and trade performance indicators to evaluate trade performance in meso level. Results show that, despite China’s vegetable products have a higher comparative advantage, but the market share rate is not high, the export structure is inconsistent with the structure of world trade, competitiveness on a declining trend. Since Japan is the largest marker, we study the trade performance about Japanese market. And the result supports the former conclusion. Second, we analyze competitiveness of China’s vegetable industry from micro level, and study upgrading process in the global value chains by case. After analyzing the upgrading process, we can find that organizations received different capability in various stages. Basic technological capabilities are mainly increased in the early stage. After a turbulent increasing stage and with the change in governance model, capabilities including related capability, product and process capability, investment capability, marketing capability are promoted by a large margin. But now is in the initial stage. Thus, the relation between what the strategy and upgrading process is and the governance of the global value chain is closely. Technical capability is throughout them. Our study also found that governance is not only the background factors of upgrading, or to the main means and content under certain conditions. This is currently an exploring issue in China’s vegetable industry. Study suggests that the current international competitiveness of China’s vegetable industry presents a "downgrade" trend. This chapter provides empirical support for the previous theoretical study to prove acquisition of technical capability is the core of upgrading, but not necessarily along the evolution path including process upgrading, product upgrading, functional upgrading and value chain upgrading.Seventhly, two successful typical cases of upgrading are analyzed furtherly. Study on China’s processing tomato industry show that, despite a clear comparative advantage, but it will not automatically become competitive advantages. Only the one who acquir the technical capability by both external learning and internal innovation can truly upgrade. And Yantai North Andre’s upgrade strategy is to start around the technical capabilities. The company joint different national value chain, make full use of chains’"capaility of the potential energy gap" to learn different technical capabilities, and cultivate independent innovation capability by building domestic value chain which aim is to upgrade of functions. Case studies in this chapter support the theoretical conclusion and support the feasibility of the strategy proposed upgrade based on theoretical arguments.Eighthly, the writer proposes the suggestion about how to upgrade China’s vegetable industry by improving the technical capacity in the global value chains. At last, the inadequate and future research prospects are put forward.