Research On The Functional Upgrading And Influencing Factors Of GVCs From The Perspective Of Local Market Demand

Upgrading the value chain to the medium-high end has become an inevitable requirement for high-quality development of the Chinese economy.The analysis of the functional upgrading of global value chain from the perspective of domestic market demand can provide a new idea for China to break the dilemma of "low-end locking",avoid falling into the trap of "functional division of labor" and realize the smooth climb of value chain.Based on the non-competitive input-output model,this paper first calculates and compares the evolution trend of the driving effect of final demand on value-added of functional activities at the national and industrial levels from 1999 to 2014,and uses the hierarchical structural decomposition method to examine the impact of domestic demand changes on the functional upgrading of global value chain.Considering that there may be significant differences among different levels of requirements,the driving factors of functional upgrading change are further analyzed from the perspectives of demand composition structure and demand product structure.The calculation results show that: during the study period,the driving effect of the added value of final demand function activities continues to grow,but there are still too high a proportion of the added value of manufacturing activities,resulting in limited upgrade.Further distinguishing domestic demand from foreign demand,it can be seen that domestic consumption demand mainly affects the added value of upgrading activities,investment demand is the source of the increase of added value of manufacturing activities,and the driving effect of added value of export demand continues to weaken after the financial crisis.The preliminary decomposition results show that: the variation of function added value is the main factor inhibiting function upgrading,the domestic input-output structure is beneficial to function upgrading to a certain extent,and the change of final demand greatly promotes function upgrading,especially the change of domestic demand has a significant effect on function upgrading.Further decomposition of the changes in domestic final demand reveals that demand expansion is the first driving factor for the functional upgrading of GVCs,demand structure promotes the functional upgrading on the whole,but the effect is very weak,and demand product structure only has a positive impact on the functional upgrading from 2009 to2014.The results of hierarchical structural decomposition show that :(1)the upgrading effect of consumption demand scale and investment demand scale tends to converge;(2)Insufficient consumption demand in the demand composition structure,especially household consumption demand,is the main factor restricting the function upgrading of value chain;(3)In the demand product structure,the demand for knowledge-intensive manufacturing and capital-intensive and knowledge-intensive service products in the demand products structure effectively promotes the function upgrading.When the analysis was extended to the industry level,the results were basically consistent with the overall level.Finally,based on the empirical analysis results,this paper provides policy enlightenment and relevant suggestions for China’s value chain to gradually realize the upward trend of "smile curve" from the perspective of demand structure.