The Impact Of The International Vertical Specialization On Industry Total Factor Productivity Of China

Studies on China’s economic development, industrial upgrading and technological progress have become prominent in academia at home and abroad.Many scholars have launched research in this field from different angles, the Total Factor Productivity is one of the hot research topics.Since1990, International Vertical Specialization and trade has been developing rapidly, more than the previous international division of labor and trade from both the breadth and depth of division of labor.The development of International Vertical Specialization This New specialize and trade adds to the researches of the growth of Total Factor Productivity. What is the true impact of International Vertical Specialization on Chinese industries-an unsustainable expansion on trading volumes or a lifting technological level? In other words, does International Vertical Specialization produce an influence on the Total Factor Productivity of Chinese industries-positive or negative? Thinking about and discussing the questions above constitutes the original intention of my paper.Through the analysis of the Total Factor Productivity of Chinese industries, we can understand our country’s technical level and position in the international division of labor system; By comparison, we can find the different influences of Vertical FDI and International Outsourcing on the Total Factor Productivity of Chinese industries, and establish somewhat different International Vertical Specialization policy for different kinds of industries.For these reasons, we classify International Vertical Specialization into Vertical FDI and International Outsourcing, Construct index for Vertical FDI and International Outsourcing, and compare the difference influences on the Total Factor Productivity growth between Vertical FDI and International Outsourcing.Through theoretical and empirical analysis, this paper obtains some instructive and useful conclusions:On the whole,the International Vertical Specialization produces the positive influence on Total Factor Productivity.In improving approaches,Vertical FDI raises Total Factor Productivity mainly by the promotion of technology level, and the influence of technical efficiency is not significant; While International Outsourcing raises Total Factor Productivity by both the improvement of technical level and technical efficiency.In different kinds of industries, the influences of Vertical FDI and International Outsourcing on the Total Factor Productivity growth are different.