Research On The Impact Of Financial Development On The Promotion Of Manufacturing Global Value Chain Position

Global value chain status enhancement is an important means to promote the development of China’s manufacturing industry at present.At present,the development of domestic manufacturing industry is facing the problem of high production scale but insufficient core competitiveness,and many important enterprises have encountered necking technology constraints in international competition,which has even led to international disputes.Domestic scholars have made many studies on the enhancement of value chain status,but they all focus on how to enhance the global value chain status of domestic manufacturing enterprises,and there is less research on the relationship between financial resource allocation and manufacturing global value chains.Financial development plays an important role in the establishment and improvement of manufacturing global value chains.Good financial development can help alleviate the financing constraints of enterprises,reduce their costs and promote technological research and development.According to the theory of endogenous economic growth,technological progress originates from investment,and the efficiency of investment,to a certain extent,originates from the degree of financial development.Therefore,the role of financial development is more obvious for the highly technologyintensive production links in global value chains,such as R&D and design and precision processing,which are,in turn,the main value-added points in global value chains and important breakthroughs for structural upgrading.An in-depth study of the theoretical relationship between the two has a positive effect on promoting the current development of China’s manufacturing industry,and has certain theoretical and practical significance as an innovation to traditional research.This dissertation firstly explores the theoretical mechanism of the impact of financial development on the global value chain status of the manufacturing industry.The theoretical mechanisms for the enhancement of a country’s global value chain status are analysed from three perspectives,namely,the mechanism for enhancing the efficiency of scientific and technological innovation,the mechanism for enhancing the efficiency of resource allocation and the mechanism for enhancing the efficiency of capital circulation,based on the three aspects of financial development.Secondly,the changing trends of financial development and the position of manufacturing global value chains in major countries in the world are analysed.Based on relevant data,the basic situation of financial development and manufacturing global value chain status of major countries and regions in the world is analysed.Finally,the empirical analysis of the impact of financial development on the global value chain status of the manufacturing industry.Firstly,an Ordinary Least Squares(OLS)regression model is used to investigate the relationship between financial development and the upgrading of manufacturing GVC status.Secondly,a mediation effect is used to test whether financial development affects the upgrading of manufacturing GVC status through the three mechanisms mentioned above,and again,a panel quantile regression is used to explore the impact of financial development on manufacturing GVC status at different levels of average production length of forward value chains,average production length of backward value chains,and at different levels of Finally,a threshold regression model is used to examine in depth the differences in the impact of financial development on manufacturing GVC status across income levels.The main findings of the study are as follows:Firstly,in terms of the impact of financial size on a country’s manufacturing GVC position,the relationship between the two is an ’inverted U’ shape that rises and then falls.In the early stages of economic development,as a country’s financial size rises,it effectively mobilises savings,boosts investment,eases financing constraints,promotes productivity growth and imports high-quality intermediate goods,thus contributing to a country’s rising position in the global value chain.However,as the scale of finance increases further,it will lead to more resources flowing to the financial sector,which will hinder the advancement of a country’s manufacturing sector in GVCs.At this stage,the impact of financial scale on the upgrading of manufacturing GVCs in developing countries and regions is greater than that in developed countries and regions;the impact of financial scale on the upgrading of GVCs in capital-intensive industries is greater than that in labour-intensive industries.Second,in terms of the impact of financial structure on a country’s manufacturing GVC position,there is a ’U-shaped’ relationship between the two.A market-driven financial structure can hinder a country’s advancement in GVCs at the initial stage of economic development,when developing countries start to join GVCs.However,as the level of economic development increases,its impact on the position of a country’s manufacturing industry in the GVCs will gradually increase,and will eventually contribute to the upgrading of the position of a country’s manufacturing industry in the GVCs.At this stage,the financial structure based on indirect financing has a greater impact on the upgrading of the status of manufacturing global value chains in developing countries and regions,while the financial structure based on direct financing has a greater impact on the upgrading of the status of manufacturing global value chains in developed countries and regions.Again,in terms of the impact of financial efficiency on the position of a country’s manufacturing GVCs,the improvement of financial efficiency will promote the improvement of the position of a country’s manufacturing GVCs.At the same time,this effect holds true for developing and developed countries alike.The impact of financial efficiency on the improvement of the GVC position of capital-intensive industries is greater than that of labour-intensive industries.Finally,the study finds that financial development has a heterogeneous impact on the GVC position of manufacturing across different levels of development,with a smaller impact on the GVC position of manufacturing in the top 10% and a larger impact on the GVC position of manufacturing in the bottom 10%.