The Influencing Factors Of Functional Ugrading Embedding In Global Value Chain: An Empirical Study Based On Zhejiang Textile & Garmen Enterprises

With the accelerating pace of economic globalization, more and more Chinese enterprises have been incorporated into the global production networks. The fragmentation of global value chain provides enterprises of China the opportunity of embedding in global value chains, while achieving upgrading at the same time. However, although developing country firms have been involved in more productive activies, their situation has not been fundamentally improved as expected. Most enterprises are still engaged in the low value-added activies of global value chain. As a result, how to effectively improve the status of Chinese enterprises has become an important issue which academies and managers are both concerned about.Global value chain theory, industrial cluster theory and firm capability theory are three important theoretical frameworks which are applied to analyze upgrading. Gobal value chain theory emphasizes that the knowledge transfer from leading enterprises to suppliers is an important factor to functional upgrading; Industrial cluster theory considers that the coopration between local enterprises is the main driving force; Firm capability theory emphasizes the accumulation and creation of internal knowledge is important.Although each theory emphasizes different aspects of this problem, they have complementary analytic levels and compatible theoretical foundations among their different frameworks. Therefore, this paper tries to integrate these theoretical frameworks and expects this integration can provide a thorough and deep understanding to the functional upgrading of developing country firms.Therefore, based on the system analysis of global value chain theory, industrial cluster theory and firm capability theory, this paper constructs a conceptual model of influencing factors of functional upgrading. At the same time, this paper adds the developing stage and scale of enterprise into this model to study their different influences on upgrading. In addition, this paper made a questionnaire survey among Zhejiang textile&garment enterprises, and obtained 156 valid questionnaires. Finally, by using factor analysis, variance analysis and multiple regression analysis, this paper verifies the above conceptual model and research hypothesis. The results can be conclued as: 1. The influencing factors of functional upgrading can be divided into external factor and internal factor. Among them, external factor includes the support of leading enterprise, local knowledge spillover, cooperation among local enterprises and local institutional support, while the internal factors mainly includes the ability of knowledge absorption and innovation,financial capability and enterprise strategic planning capability. What's more, compared with the external factor, internal factor plays a more important role in functional upgrading.2. Leading firms of global value chain impend functional upgrading of Zhejiang textile& garment enterprises, while industrial cluster effect and the enterprise characteristic both have a significantly positive effect on functional upgrading of enterprises.3. Among all these factors, the ability of knowledge absorption and innovation is the most important one as to the functional upgrading of Zhejiang textile& garment enterprises, followed by the enterprise strategic planning capability.4. There is no signifiancant association between development stage of enterprises and the functional upgrading. But there is a significantly positive correlation between enterprise scale and functional upgrading.