Domestic segment of global value chains in China under state capitalism

Tang, Heiwai; Wang, Fei; Wang, Zhi

doi:10.1016/j.jce.2020.04.002

Cited by 25 publications

(15 citation statements)

References 30 publications

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“…Again focusing on China, Ma, Wang and Zhu (2015) construct extended IO tables that distinguish foreign from Chinese-owned firms, whileTang, Wang and Wang (2017) distinguish between state-owned and private enterprises in China.…”

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confidence: 99%

Measuring Global Value Chains

Johnson

2018

Annu. Rev. Econ.

167

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Recent decades have seen the emergence of global value chains (GVCs), in which production stages for individual goods are broken apart and scattered across countries. Stimulated by these developments, there has been rapid progress in data and methods for measuring GVC linkages. The macro approach to measuring GVCs connects national input–output tables across borders by using bilateral trade data to construct global input–output tables. These tables have been applied to measure trade in value added, the length of and location of producers in GVCs, and price linkages across countries. The micro approach uses firm-level data to document firms’ input sourcing decisions, how import and export participation are linked, and how multinational firms organize their production networks. In this review, I evaluate progress in these two approaches, highlighting points of contact between them and areas that demand further work. I argue that further convergence between these approaches can strengthen both, yielding a more complete empirical portrait of GVCs.

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confidence: 99%

Measuring Global Value Chains

Johnson

2018

Annu. Rev. Econ.

167

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“…These two types of export products use substantially different input mixes; processing exports require far more imported intermediate inputs than ordinary exports, and ordinary exports have stronger backward linkages in China (Pei et al, 2012). Accordingly, a renminbi of processing exports tends to generate considerably less value added in China than a renminbi of ordinary exports (Chen et al, 2012; Koopman et al, 2012; Pei et al, 2012; Tang et al, 2020). If processing exports generate value added in China almost exclusively due to the exports processing itself, while ordinary exports have “longer” domestic parts of chains, it is probable that changes in the magnitudes of the two types of exports had impacts on regional income inequality.…”

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confidence: 99%

Regional inequality in China during its rise as a giant exporter: A value chain analysis

Duan

Dietzenbacher

Los

et al. 2022

Journal of Regional Science

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China's exports success has implications for regional income inequality, because most of its export products are manufactured in the coastal zone. We propose a value chain‐based accounting framework to quantify the contributions of exports to regional income inequality. We employ newly developed interregional input–output tables for China, which distinguish between processing export activities and ordinary export activities. We analyze the period 2002–2012, the decade during which China became the “Factory of the World.” We find that an RMB of processing exports contributed much more to regional inequality than an RMB of ordinary exports or domestic final demand. Still, changes in regional inequality (increasing in 2002–2007 and decreasing between 2007 and 2012) are much more due to rising ordinary exports in the first subperiod and the growth of domestic final demand coupled with changes in the configuration of value chains in the second.

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“…This provides a bridge between research by trade economists on GVC activity, and research by development, industrial organization, and macro economists on firm growth and structural transformation. Prior studies have linked access to imported inputs and learning from foreign partners to firm productivity growth (e.g., Amiti and Konings 2007, Kasahara and Rodrigue 2008, Goldberg et al 2010, Halpern et al 2015, examined trade-related growth in productivity and domestic value added within Chinese firms (e.g., Brandt et al 2012, Kee and Tang 2014, Tang et al 2020, and showed that processing trade can be a stepping stone to higher value added, more profitable and more liquidity-intensive ordinary trade in the presence of financial frictions (e.g., Manova and Yu 2016). A separate line of research has identified systematic patterns at both the country and firm levels in the expansion of product scope and in the transition across products, based on similarity in input use, upstream-downstream production links, or progression towards greater technological sophistication (e.g., Hausmann et al 2009, Bernard et al 2010, Boehm et al 2019.…”

Section: Introductionmentioning

confidence: 99%

Growing Like China: Firm Performance and Global Production Line Position

Chor¹,

Manova²,

Yu³

2020

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Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.

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Domestic segment of global value chains in China under state capitalism

Cited by 25 publications

References 30 publications

Measuring Global Value Chains

Measuring Global Value Chains

Regional inequality in China during its rise as a giant exporter: A value chain analysis

Growing Like China: Firm Performance and Global Production Line Position

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