| The rise of global value chains has built up a production framework in which different companies across borders or regions participate in different processes and commercial functions.In a specific global value chain(hereafter GVC),different countries specialize in the value creation stage of a specific product or service.The input intensity of production factors and the difference in factor prices lead to the two ends of the value chain-design,research and development at the beginning,and marketing and brand at the end-often create higher valueadded than intermediate manufacturing stages,namely “smile curve” of value creation in global value chains(hereafter GVCs).In other words,intangible assets represent a very important economic growth resource and value creation driver in GVCs.The "World Intellectual Property Report 2017" issued by the World Intellectual Property Organization(WIPO)shows that between 2000 and 2014,the 19 manufacturing industries under the International Standard Industrial Classification(ISIC Rev4)increased by 75% in overall intangible asset income and the intangibles share averaged 30.4 percent throughout this period,almost double the share for tangibles.Intangible assets have become an important source of the comparative advantage of economies in the international division of labor and the enhancement of the value-added of products and services.Since the reform and opening up,China has gradually upgraded from a mode of trading mainly exporting low-value-added primary products to that of exporting high-tech and highvalue-added products.In general,however,developed countries not only strongly control core technologies in key industries and fields in the high-end industry,but also highly occupy an competitive advantage status by outstanding brand quality,and have absolute discourse in international standard setting,design,and technological innovation,which lets them have won most of the dividends of economic globalization.In this context,scientifically analyzing the impact of global value chain participation on the income of intangible assets and in-depth studying on the income effect of intangible assets of different GVC participation methods have significant theoretical and practical meaning for China to realize the extension from low-paid processing and assembly stages to high-value-added technology,brand,and marketing segments,and to promote deep reconstruction of GVCs,and to cultivate new momentum for the sustainable development of international trade.Based on the above analyses,this article first uses the combined data of Penn World Table(hereafter PWT),Federal Reserve Economic Data(hereafter FRED)and Wind and other databases to calculate and analyze the income shares of labor,tangible and intangible capital in29 countries/regions from 2000 to 2014 at the country level,and then employs the combined data of Socio Economic Accounts(2013,2016),FRED,Wind and other databases provided by World Input-Output Database(hereafter WIOD),and the same method at the country level analyses to calculate the factor shares of 18 manufacturing industries in 35 countries/regions from 2000 to 2011 at the industry level for further studying the income structure of production factors in the manufacturing sector of different countries.The innovation in measurement analysis is that the real interest rate is calculated by using the fixed return rate of ten-year Treasury Yields in various countries to deduct the expected inflation rate,which overcomes the estimation bias of the intangible income that may be caused by using a fixed real interest rate that does not change with time and country.The results of calculation and analysis at the national level show that from 2000 to 2014,the tangible income share in China showed a significant upward trend as a whole,and exceeded the proportion of intangible income in 2011.In contrast,compared with 2000,China’s labor income share fell by 1.4 percentage points in 2014,which is much smaller than the decline in the income share of intangibles.In addition,comparing to tangible assets,the decline in the labor share was thus mainly mirrored by an increase in the intangible share,which is measured as a residual after subtracting labor and tangible capital income shares.Further comparing the changes of China’s factor income distribution to the overall income structure of other 28 out of42 countries in WIOD,it is found that during the same period,the average income share of intangibles in these countries had shown a significant upward trend,and had always been higher than that of tangibles.Another notable feature of the changes in the factor income structure of these countries was that the changes in intangible income share and the labor income share were more tightly inverse than the corresponding results in the national level analyses.Since the vast majority of the 28 countries are developed economies,the different trends in the income share of intangibles between China and developed countries reflect the differences in the sources of national competitiveness: developed countries invest more in intangibles to form national competitive advantages and the significance of intangibles in economic growth has gradually increased,while tangibles have played a relatively more important role in China’s economic growth.The calculation and analysis results of the manufacturing industries show that the income share of tangibles in China’s manufacturing sector in 2011 was slightly greater than that of intangibles,and the factor shares of different manufacturing industries varied significantly.Specifically,industries with a relatively high income share of intangibles in China were usually industries that were highly dependent on domestic supply chains or had high economies of scale,such as food,beverages and tobacco,power equipment and automobile,trailer and semi-trailer manufacturing.However,intangible share created by non-development and-research(hereafter non-R&D)intangibles such as design,brand value,and marketing were much lower in textiles,clothing and leather,coke and refined petroleum products,computers,electronics and other optical products,and furniture and manufactured products.The relatively low share of China’s intangible income share in those industries reflects the relatively weak international competitiveness of China’s manufacturing products and services in terms of non-R&D intangibles.Therefore,promoting the manufacturing industry to move towards the high valueadded production stages of the GVC is still a major issue that needs to be solved urgently.In general,compared with the average intangible share of developed countries and their manufacturing industries,that of China and its manufacturing industry was significantly lower,reflecting that China and its manufacturing industry were still in the micro-profit and low-valueadded stages in the global value chains.The upward trend of global income share of intangibles and the inverse relationship between labor and intangible shares reflect the fact that both ends of the “smile curve” of GVCs have become steeper.These facts arise the core of questions of this research: does the increasingly refined and complicated global division of production improve the status of intangibles in income distribution? Through what channels does GVCs influence the economy to extend to high value-added production stages? Will participation in GVCs help the intangible comparative advantages of developing countries converge to that of developed countries?For answering the above questions,on the basis of calculation and analysis,this article further empirically analyzes the impact of GVC participation on the income of intangibles from two dimensions: the degree of GVC participation and the production structure complexity of GVCs.The empirical research has the following innovations:(1)From the perspective of "quality" rather than "quantity" of intangibles,this article examines the absorptive capacity mechanism of GVCs influencing the comparative advantage of technology and knowledge;(2)providing empirical evidence for theoretical viewpoints that GVCs help intangibles achieve larger effect of economies of scale;(3)Using the intellectual property protection indicators provided by the World Economic Forum to confirm the monopoly rent theory mechanism of GVCs in increasing the income of intangibles;(4)employing statistic regressions by groups confirms that the effects of participation in GVCs and the complexity of the production structure on the income share of intangibles vary with national development levels.In the specific empirical research,this article first uses national panel data and fixed-effect models to empirically test the income effects of intangibles of participating in GVCs.The empirical tests find that the economy mainly achieves a higher income share of intangibles through the increase in backward industrial linkage participation,namely the income share of intangibles increases with the rise in the share of imported value-added in output,indicating that higher quality or lower cost imported intermediate inputs are an important factor in increasing the value-added of exported products and services.The above conclusions are still valid in the robustness tests such as changing the calculation method of intangible income and considering endogenous issues.The degree of participation in forward linkages has reached completely opposite conclusions in different robustness tests.However,taking into account the endogenous problem,the income share of intangible assets will increase as the degree of participation in forward industrial linkages grows,that is,for the country as a whole the improvement of the quality and value-added share of domestic intermediate inputs is also an important way to increase the relative return of domestic intangibles.In terms of the complexity of the production structure of the global value chain,neither the forward industrial linkage production length nor the industrial linkage production length has a statistically significant effect on the income share of intangibles,but the extension of the international proportion of the forward industrial linkage production length significantly promotes the increase in the income share of intangibles,while expansion of its domestic proportion has an opposite effect.This is consistent with the theoretical point of view that the increase in the number of stages of international processing of intermediate input exports will help intangibles expand their scope of influence and use their almost negligible marginal costs to form greater economies of scale in intangibles and thus increase its income share;The increase in the number of domestic processing stages of imported intermediate inputs may mean that more domestic intermediate inputs of lower quality or cost advantages enter into production,reducing intangible asset intensity and the market competitiveness of final products and services,which leads to a decrease in the relative return of intangibles.Using the ratio of domestic value-added export to the sector’s total value-added export and the share of foreign value in final products to replace the participation of forward and backward industrial linkages respectively,this article further examines the effects of total domestic valueadded in exports and foreign value-added in imports of intermediate goods on the income share of intangibles.The empirical evidence shows that the income share of intangibles will not be affected by ratio of domestic value-added,but will increase with the rise in the proportion of foreign value in final products.These results further strengthen the core conclusion of this article: higher-quality or lower-cost foreign intermediate inputs can increase the technology and knowledge intensity of products and services,and the intangible income share grow accordingly.In view of the importance of the import of intermediate goods on the income of intangibles,this article uses the number of authorized patents as an agent to measure the economy’s investment in intangible assets,and examines whether the degree of participation in backward linkages promotes the downstream sector to increase the input of intangibles in order to achieve the threshold of understanding and using foreign technology and knowledge,as well as the human capital and organizational capital needed to match the refined production process resulting from using those higher quality imported inputs,that is,the absorptive capacity mechanism,has increased the intensity of intangible assets in products and services.Consistent with theoretical expectations,the regression results of the intermediary effect model confirm the existence of the absorptive capacity mechanism.The import of intermediate goods increases the investment demand of importing countries for intangibles,which in turn increases the intensity of intangibles in products and services,but the mechanism does not reflect in the changes in the degree of participation in the forward industrial linkages.The real economy is the foundation for the formation of national economic development and international economic competitiveness.To achieve high-quality development of the real economy,the foundation lies in the manufacturing industry,the center is on the GVC,and the channel lies in the realization of the increase of the GVC position.To test the impact of GVCs on the income share of intangibles at industrial level,this article first follows the logic of the national panel data benchmark regression to conduct an empirical test on the manufacturing sector to compare the similarities and differences between the country as a whole and the manufacturing sector in the GVC participation on the income of intangibles.Similar to the evidence from national panel data,the income share of intangibles in the manufacturing sector increases with growth of the participation level of backward industrial linkages and the proportion of foreign value-added in final products.At the same time,the forward industrial linkage production length of the manufacturing sector and the extension of its international portion also have a positive and statistically significant effect on the income share of intangibles.The difference is that the income share of manufacturing intangibles will decrease as the degree of participation in forward industrial linkages increases;the coefficient of domestic proportion’s production length of manufacturing backward industrial linkages is still negative but has passed the significance,indicating that the increase of the number of domestic production stages resulted from imports of intermediate inputs will inhibit the relative return of intangibles.The above conclusions are still valid in the robustness tests such as changing the calculation method of intangible income and considering endogenous issues.On the whole,the income share of intangibles in the manufacturing sector is more significantly affected by the GVC,and the regression results further strengthen the robustness of the core conclusions of this article.Further empirical research using the moderating effect model at manufacturing industry level to test the theoretical mechanism of financial development and monopoly rent found that stricter intellectual property protection laws and regulations will increase the monopoly rent of intangibles through the import of intermediate inputs,and the increase in the level of financial development not only directly promotes the income of intangibles but also strengthened the promotion of the import of intermediate goods on the income share of intangibles.The results of the mechanism test are consistent with theoretical expectations.An important goal for developing countries to participate in GVCs is to achieve convergence of technology and resource endowments to developed countries,and one of the important signs of achieving this goal is to realize the extension to both ends of the "smile curve" of GVCs.To this end,from the perspective of intangible income share which is a symbol of "quality" of technology and knowledge output,this paper uses regressions by groups in terms of national development levels to explore the national heterogeneity effect of GVC participation on the value creation of intangibles from multiple dimensions.The regression results found that the import of intermediate goods significantly increased the income share of intangibles in the manufacturing industry of developed countries,while the increase in the participation of forward industrial linkages produced the opposite inhibitory effect.In contrast,there is no evidence that the increased participation of backward industrial linkages contributes to the increase in the share of intangible capital income in the manufacturing sector in developing countries.The increase in the share of intangible capital income in developing countries mainly depends on the degree of participation in forward industrial linkages,namely that the increase of intangible income share of developing countries is drove by the rise of ratio of domestic value-added of exports to total sector’s gross value-added.In addition,the increase in the processing stages of intermediate exports induced by domestic and foreign outsourcing has both significantly enhanced the income share of intangibles in developed countries,while developing countries can only benefit from the latter,and the increase in the domestic processing stages of intermediate exports does not affect the relative returns of intangibles in developing countries.An empirical test that further uses the proportion of foreign value-added in final outputs to replace backward industrial linkage participation shows that the increase in the ratio of foreign value-added in final outputs significantly promotes the growth in the income share of intangibles in the manufacturing sector in developed countries,but it will inhibit the growth in that of intangibles in developing countries,namely that the deepening of vertical specialization reduces the intensity of intangibles in outputs of developing countries,causing these countries to fall into the “low-end lock-in” predicament,and the regression results of the moderating effect show that the increase in the level of human capital helps developing countries break through the predicament.Finally,based on the research findings of calculation analyses and empirical analyses,this article proposes policy enlightenments on how to increase the domestic value-added of China’s exports and to extend to high value-added production stages in the GVC,including:(1)encouraging enterprises high-level imports and independence R&D,through policies such as promoting higher levels of openness and high-level imports,and providing more favorable conditions for enterprises’ independent R&D,using international and domestic markets and resources to alleviate the structural imbalances of the China’s supply side so as to achieve the goal of increasing the share of domestic value-added in intermediate exports;(2)ensuring the supply of human capital,by improving the talent training and introduction mechanism and further breaking down the barriers to the flow of domestic and international talents so as to enhance the level of human capital and increase the driving force for independent innovation;(3)making full use of the conditions and opportunities provided by the policy dividends and platform advantages of the “Belt and Road” initiative,overseas industrial parks,etc.,and guiding more manufacturing companies to formulate brand internationalization strategies and to drive Chinese brands to “going global” through high-quality products and services exports;(4)accelerating the improvement of domestic intellectual property-related laws and regulations,especially the rules and standards related to international trade and international investment and strengthening the risk control systems for foreign-related intellectual property risks and the protection systems of overseas intellectual property rights to escort high-quality brands to "going global" for Chinese enterprises;(5)Deepening the structural reform of the financial supply side and promoting the reform of preferential tax policies to effectively reduce the investment costs of enterprises and alleviate the problem of misallocation of market resources in order to further employ financial and tax preferential policies to encourage enterprises to invest more in intangible capitals. |
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