Research On The Impact Of Domestic Market Integration On The Rise Of Global Value Chain

The integration of the domestic market is an important link of the "dual circulation",which is of great significance for shaping China’s super large-scale economic advantages and promoting the global value division position towards the mid to high end.Therefore,the report of the 20 th National Congress of the Communist Party of China pointed out that "relying on China’s ultra large market advantage,we will deeply participate in global industrial division of labor and cooperation".In this context,this article incorporates domestic market integration and the rise of global value chain division of labor into a unified analysis framework,and conducts in-depth research on the mechanism of domestic market integration driving the rise of China’s global value chain division of labor from both theoretical and empirical perspectives.Empirical analysis of multidimensional data is conducted,and countermeasures and suggestions for coordinating the promotion of domestic market integration and the rise of global value chain division of labor are proposed.Firstly,this paper selects the inter provincial panel data from 2000 to 2016 to measure and analyze the status quo of the promotion of domestic market integration and the climbing status of the global value chain in each province;Secondly,based on Melitz’s(2003)theory of enterprise heterogeneity,market integration was added to construct a theoretical model of the impact of domestic market integration on the global value chain climb;Once again,use a fixed effects model to analyze the impact of domestic market integration on the global value chain climb in each province,and use the method of adding intermediary variables to explore the transmission mechanism of the impact;At the same time,the two-stage least squares estimation method is used to address the endogeneity problem of the model;Finally,due to the significant differences in natural resource endowments and economic development among different provinces in China,the impact of domestic market integration on the global value chain climb may be non-linear.Whether the positive impact of domestic market integration can be exerted may be related to the development of regional differentiation,that is,there may be threshold conditions for development.This article uses a threshold panel regression model to test its threshold conditions,Exploring the threshold factors for leveraging the positive effects of domestic market integrationThe research results indicate that: firstly,the level of domestic market integration in China has significantly improved,and the division of labor in the global value chain has also achieved a certain increase,but it shows heterogeneity in regions and periods.Secondly,from a national perspective,the integration of the domestic market has driven up the global value chain,but there are differentiated impacts in the three major regions and at different times.Third,the release of demand potential,the drive of technological innovation and the accumulation of human capital accumulation are effective paths for domestic market integration to promote the rise of the global value chain.Fourthly,the results of the threshold panel regression model indicate that the impact of domestic market integration on the global value chain climb is non-linear;That is,when regional technological innovation and human capital accumulation exceed a certain threshold,domestic market integration can play a positive role in boosting the global value chain.