Research Into Local Firm Growth And Our Country's Countermeasures Based On Global Value Chain

The economic globalization brings the globalization of resource allocation and the new pattern of international division of labor. This new pattern means that different links of the global value chain are distributed in different countries, which brings opportunities for developing countries'local firm growth. So the study of local firm growth based on global value chain is necessary.This paper reviews the theory of firm growth, including the organic firm growth theory, the acquired firm growth theory, and the network-based firm growth theory, and studies firm growth based on global value chain theory which is a new perspective.Firstly, this paper studies the ways in which local firms enter the global value chain and the barriers they may meet with. By entering the global value chain, local firms can get the capital, the market and the knowledge which are necessary for their growth. Local firms enter the global value chain mainly by accepting FDI and OEM/ODM. But the local firms may meet with all kinds of micro-barriers and macro-barriers during the process of their entry. And with the mature of the global value chain, the entry of local firms becomes more and more difficult.Secondly, this paper studies local firm growth based on global value chain. On the global value chain, local firms interrelate with the multinational companies, and get the motivity for ability growth. Ability growth provides the important precondition for firm growth. However, because of the different relationships of controlling between local firms and multinational companies, the opportunities for local firm growth are different. So this paper studies the local firm growth based on global value chain from these three aspects that is the mechanism of firm ability growth, the mode of firm growth, and the opportunities for firm growth. Firstly, on different types of global value chains, the ways in which the local firms and the multinational companies interrelate with each other are different, so the mechanism of firm ability growth is different. According to the different driven forces, this paper classifies the global value chain into two types, buyer-driven global value chain and producer-driven global value chain. And this part discusses the mechanism of how multinational companies help local firms improve their abilities in technique, management and marketing. Secondly, according to the distribution of different links'added-value on global value chain, this paper describes the smile curve. Using the smile curve as a tool, this paper studies the modes of local firm growth, and concludes them into three types, the enlarging of firm scale on manufacturing link, the functional growth of transiting to links with higher added-value, and the upgrading-type growth of transiting to another global value chain with higher added-value. Thirdly, this paper studies the opportunities for firm growth under different patterns of global value chain governance. In this part, this paper provides the five patterns of global value chain governance, market pattern, modular pattern, relational pattern, captive pattern and hierarchy pattern, then analyzes and compares the different relationships between local firms and multinational companies under these five patterns. The differences of relationships lead to different opportunities for local firms'growth. To make the study easier, according to the similarity of some patterns, this paper puts them into one group. It puts modular pattern and market pattern into one group and puts captive pattern and hierarchy pattern into one group, and analyzes the opportunities for firm growth under the market pattern, relational pattern and captive pattern.Thirdly, this paper studies the case of Glanz Group and TSMC, mainly analyzes the ability growth and growth mode, demonstrating the theoretical study above.Finally, this paper deeply analyzes the problems facing our country's firms in the process of growing on global value chain, and provides the mode for our country's firm growth and the countermeasures to solve the problems for the firms and the government.