Research On The Impact Of Outward Foreign Direct Investment On The GVC Position Of China’s Manufacturing

With the deepening of the international division of labor,the division of labor in the global value chain has become the main form of international division of labor.In the past,China’s manufacturing industry participated in the global value chain through processing and assembly.However,with the rise of domestic production costs,the transfer of foundry links,coupled with the rise of protectionism in the international market,the revitalization of manufacturing in developed countries,the obstruction of technology flow,the transformation and upgrading of China’s manufacturing industry is facing dual challenges,and the improvement of global value chain status(GVC position)is facing two-way pressure.Outward direct investment(OFDI)is one of the ways to influence the GVC position.Studies have found that OFDI can have an impact on GVC position.This paper studies whether OFDI has an impact on the GVC position of China’s manufacturing and what the impact effect is,can put forward policy suggestions to promote the GVC position of China’s manufacturing from the perspective of OFDI.At the same time,the heterogeneity analysis of the flow of OFDI to manufacturing industries with different technology levels and economies with different income levels can adjust OFDI policies from a more comprehensive perspective,promote the rise of the GVC position of China’s manufacturing,and enhance the international competitiveness of China’s manufacturing industry.This paper aims to study the impact of OFDI on the GVC position of China’s manufacturing.Firstly,the relevant concepts,related theories and influence mechanisms are expounded.Secondly,this paper analyzes the status quo of China’s outward direct investment and manufacturing GVC position.This paper refers to the classification standards of the manufacturing industry in the National Economic Industry Classification(GB/T 4754-2002),the International Standard Industrial Classification(ISIC Rev.4)and the OECD World Input-Output Table,selects 15 sub-industries according to data availability,and adopts the method of Koopman et al.(2014)to decompose the manufacturing exports in the world input-output table through Python software,and calculates the corresponding GVC position index according to the results of trade added value decomposition.Then,taking GVC position the explanatory variable and manufacturing outward direct investment as the core explanatory variable,this paper introduces human capital,industry openness,R&D investment,industry scale,and asset contribution rate as control variables to construct an empirical model,and uses the panel data of China’s manufacturing industry from 2009 to 2018 to carry out benchmark regression and heterogeneity analysis,and performs robustness testing.Based on the research and analysis,this paper finally draws the following conclusions: First,from the perspective of the industry as a whole,outward direct investment can significantly affect the GVC position of China’s manufacturing industry,and has a role in promoting the overall GVC position of the manufacturing industry;Second,from the perspective of heterogeneous industries,OFDI has a significant positive impact on the improvement of GVC position in low-tech and low-medium-tech industries,but has no obvious effect on the GVC position of high-tech industries.Third,from the perspective of heterogeneous OFDI,OFDIt in high-income economies has the greatest positive effect on the GVC position of China’s manufacturing,followed by direct investment in low-income economies,and relatively minimal impact on OFDI in middle-income economies.In addition,it is found that R&D investment can significantly promote the overall GVC position of China’s manufacturing industry,while industry openness and industry scale have a negative impact on the improvement of GVC position.Based on the research conclusions,this paper puts forward policy suggestions to enhance the GVC position of China’s manufacturing industry: First,formulate differentiated OFDI policies;Second,promote the transformation and upgrading of the manufacturing industry;Third,build a high-level regional value chain.