Analysis On The Influence Of Global Value Chain On The Labor Income Share

With further deepening of the international fragmentation of production,the global value chain has become one of the typical manifestations of economic globalization.Under the organization and control carried out by the global value chain,economic globalization has evolved into a coordination which characterized by function integration and international decentralized activities.Development countries which have high-tech and developing countries which hold ample cheap labor adopt a different approach to attend into the global value chain.Such as China,it attends into global value chain mainly through taking labor intensive production process and it is the most important manufacturing platform of outsourcing.However,as the extent of participation in economic globalization was rising,the labor income share was declining at the same time.Meanwhile,it is not only an individual phenomenon in China,but also a kind of trend met by other developing and development countries.Under this background,the research what effect global value chain bring to countries'labor share and how it effect labor share in China seems to be realistic and important.This thesis mainly applies WIOD data base to analyze the labor share in more than 40 countries all over the world and various sections in China.Using Wang' s method that resolve gross output into several parts,this paper improves GVC Position established by KPWW in 2010,measures countries position,participation and Chinese sections' position,participation and competitiveness in global value chain.Then on the base of these,this paper utilizes the Panel Data in the period of 1995-2009 to make an empirical analysis of the effects that global value chain brings to the labor share.Results show that,by national panel data,there is a positive correlation between the global value chain and labor share.In developing countries,notably,if they attend into the global value chain,their labor share will be improved.By using Chinese panel date,however,there is a negative correlation between the global value chain and labor share in China.Meanwhile,this negative influence in manufacturing industry outweighs the service industry.And the empirical results also show that the global value chain competitiveness will play a constructive role in China's labor income share.This paper argues that the main channel through which the global value chain has an influence upon china labor income share is the fallacy of composition and the low-end lock.To point those two channels,this paper gives some constructive suggestions on how to improve Chinese labor income share.