The Impact Of Institutional Quality On The Position Of Global Value Chain Of Manufacturing Industry

With the rapid development of the global economy,the division of labor model with crossborder cooperation as the common expression has become more and more prominent in the importance of the global value chain,and only countries with a high position in the global value chain can occupy a leading position in the value chain and lead the economic lifeline of the industry.In the past 40 years of reform and opening up,China’s opening up to the outside world has made great strides,which has been making China quickly become the second largest trade exporter,but the status quo of "big but not strong" and "long-term low-end locked" has always restricted China’s economic development to a higher level.Especially with the rise of China’s labor prices,labor-intensive industries have gradually been transferred to Southeast Asia and other countries,the comparative advantage of traditional labor endowments is no longer there,and China’s manufacturing exports need to be transformed.However,existing research is inconsistent with the concept and measurement of global value chains,and there is a lack of indepth discussion of its influencing factors and mechanisms.Therefore,it is necessary to conduct a more systematic and comprehensive study of the influencing factors affecting the status of the global value chain of the manufacturing industry,so as to provide different path choices for the continuous improvement of the status of the global value chain of China’s manufacturing industry,so as to change the situation of China’s original low-end locking in the global division of labor system.Taking the enhancement of the status of the manufacturing global value chain as the starting point,this paper discusses and studies the theoretical mechanisms of the direct and indirect effects of institutional quality on the status of the manufacturing global value chain from the theoretical and empirical perspectives respectively.Firstly,this paper sorts out the relevant literature of institutional quality and global value chain,and concludes that institutional quality affects a country’s comparative advantage through human capital and technological innovation,and then affects the economic status of its manufacturing global value chain,and may be different in countries with different income levels,and various manufacturing sub-sectors may also be heterogeneous.Secondly,this paper uses the improved manufacturing global location index to measure the data of 43 countries,comparing China with high-income countries and middleincome countries,and also includes the comparison of institutional quality levels in the world.The panel data of 43 countries in 11 years from 2009 to 2019 were used for empirical testing and heterogeneity analysis,and the empirical results fully confirmed the theoretical hypothesis and concluded that institutional quality has a significant role in promoting the status of the global value chain of manufacturing,and by improving human capital and technological innovation,there is also significant heterogeneity between countries and sub-industries.Finally,this paper puts forward policy suggestions to strengthen institutional construction and build a positive business environment to enhance the status of China’s manufacturing global value chain.