The Impact Of China’s Outward Foreign Direct Investment On Value-added In Export

China’s exports have experienced years of rapid growth since the reform and opening and its goods export has achieved 2 trillion dollars,which implicates that China has became a large trading country.However,in the background of global value chain specialization,China is far from strong trading country,which is indicated by in charging of low value-added process,using non-skill labor intensively and high-quality factor such as technology less intensively.Transforming from “scale growth” to "structural optimization",from low value-added rate process to high value-added rate process,from using low quality factor intensively to using high quality factor intensively are the urgent problems that China’s exports need to solve at this stage.When exports go up,China’s outward foreign direct investment(OFDI)has also ranked 3rd in the world,while outward foreign direct investment is an important way of cross-national economic cooperation and plays the roles of acquiring technology,transferring industry and distributing production process around the world.Against this background,the relationship between China’s OFDI and its exports has drawn wide attention.Even many classic literatures have studied the substitution or complementarity relationship between OFDI and exports,the effects of OFDI on value-added in export is not been thoroughly studied.Under the division of labor system of global value chain,value-added in exports means that the domestic value contribution in the whole export value,which is the accurate measurement of domestic product export,meanwhile the labor structure and technology embodied in value-added in export can reveal the upgrading of export.Therefore,it’s not only deepen and expand the theoretical research on the relationship between OFDI and exports,but also provide clue of China transforming from “big trading country” to “strong trading country” from OFDI perspective,by studying the relationship of OFDI and value-added in export from the angle of scale,industry structure,labor structure and technology content.Through reviewing relevant literatures systematically,this dissertation finds that the following aspect can be further studied: Firstly,concerning to the effect of OFDI on the scale of value-added in export,while the theoretical analysis shows that horizontal OFDI replaces the domestic exports,and vertical OFDI promotes the domestic exports,however,the empirical analysis does not distinguish between horizontal and vertical OFDI.Besides,it’s lack of study on the effects of OFDI on value-added in export,even value-added in export is the more accurate measurement of domestic product export.Secondly,it’s more focus on the product structure when studying the relationship between OFDI and export structure.There are two deficiencies studying the export structure through final export product: one is that final export product structure can’t reveal the real export structure,since not all value in final product are produced in one country;the other is that the change of final export product structure can’t show the upgrading of export accurately when final production structure keeps unchanging but the input factors are changing.Thirdly,the studies of OFDI and technology level of export are emphasis on the reverse technology spillover mechanism.In fact,the mechanisms of OFDI affect technology level of export include multiple channels,such as industrial structure changing,technology level changing and so on,which are lack of empirical specification test.Based on the existing study and the possible research direction mentioned above,this dissertation shows the characters and problems of OFDI and value-added in export by displaying the historical and current situation of OFDI and value-added in export firstly,then studying the effects of OFDI on value-added in export from the angles of scale,industry structure,labor structure and technology using theoretical and empirical method as follows:Firstly,this dissertation analyzes how OFDI affects the scale and industry structure of value-added in exports,and finds that the horizontal OFDI and vertical OFDI influence value-added in exports through different channels.By using the panel data of 19 host countries,this dissertation investigates OFDI’s scale effect and structure effect on value-added in exports,the conclusions are as follows:(1)Concerning scale effects,both horizontal and vertical OFDI can significantly promote value-added in exports,specifically the horizontal OFDI flowing to developing countries and the vertical OFDI flowing to developed countries have more lasting effects;(2)Concerning structure effects,by reducing the dependence on resource inputs and improving the contribution of producer services,the horizontal OFDI can enhance the structure of value-added in exports;As for the vertical OFDI,it can stimulate the growing of headquarter service in home country,and improve the rate of advanced producer services in value-added in exports.Secondly,based on the theoretical framework of Feenstra and Hanson(1995),this dissertation analysis the impacts of outward foreign direct investment on the labor structure embodied in export.By using the panel data of labor structure embodied in export and OFDI of 64 host countries from 2003-2009,we test the theoretical hypothesis empirically.The conclusion are as follows: In general,China’s OFDI reduced the skilled-labor ration embodied in export.Specifically,the global-value-chain transfer effect of OFDI that opposite to specialization gradient reduced the high-skilled labor ratio embodied in export,while its reverse technology spillover effect increased high-skilled labor ratio.Meanwhile the global-value-chain transfer effect of OFDI that along the specialization gradient can improve the skilled-labor ratio embodied in export,but its technology spillover effect may hamper the enhancing of labor structure embodied in export.Thirdly,by presenting a framework that analyzes the effect of OFDI on technology content embodied in export(TIE)from technology effect,production structure effect and export amount effect,calculating technology content of China’s export to 84 countries using WIOD data and using system GMM method to test the effects and mechanisms of OFDI on TIE.This dissertation finds that China’s OFDI improves TIE through three channels including technology effect,product structure effect and export amount effect,meanwhile the positive effect of OFDI on TIE of intermediate export is prominent.Besides,OFDI with different motivation have different impacts on TIE,which means that the OFDI with resource seeking motivation promotes TIE through improving input-output structure and total export scale,the OFDI with market seeking motivation only impact TIE positively through improving total export scale,the OFDI with technology seeking motivation enhance TIE through technology effect,input-output structure effect and total export amount effect.The main innovation of this dissertation are as follows: Firstly,expanding the relationship study of OFDI and export to value-added in export.Since total export value report by traditional statistical method can’t measure domestic product export accurately and the mechanisms of OFDI impact total export and value-added in export maybe different,so the study of this topic is innovative.Secondly,expanding the value-added export research to the industry contribution,labor structure and technology embodied in export,which is hardly done by ordinary export research.The research of value-added in export are more focused on the measurement problem,while the other content has been ignored.Thirdly,studying the different effects of horizontal OFDI and vertical OFDI on export empirically.This dissertation presents a method of calculating horizontal and vertical OFDI in industry and country level based on “List of Overseas Investment and Cooperation Enterprises”.Additionally,this dissertation establishes a theoretical model from the perspective of developing countries to analyze the relationship between OFDI and labor structure embodied in export.The existing theoretical researches mostly study the relationship between OFDI and home labor market from the perspective of developed countries,but lack of studying the effect of developing country’s OFDI on home country’s labor market.Finally,this dissertation establishes an analytical framework based on technology effect,input-output structure effect and total export scale effect.Most of the existing studies explain the impact of OFDI on technology level of export through reverse technology spillover mechanism.By providing a method of calculating the technology margin,structural margin and export scale margin of technology content embodied in export,this dissertation also tests the three mechanisms empirically.