Differences in Service Input Sources，Manufacturing Servitization and GVC Upgrading

Abstract

Faced with the current deep adjustment of the global economy and the rising cost pressure of domestic production factors, China’s low-end” integration into the GVC brings an unbalanced, uncoordinated and unsustainable problem. This problem is getting more and more prominent. One consistent view of the academic community is that the higher the level of manufacturing servitization is, the more favorable it is to the promotion of GVC upgrading. The current evolution of GVC has not only occurred in the manufacturing industry, but also continued to spread to the service sector. In this context, services which have entered into the manufacturing process include not only domestic input but also foreign input. The manufacturing service realized by different service input sources, such as whether from domestic or foreign countries, will have a different impact on GVC of the manufacturing industry. It still needs to be answered at theoretical and empirical levels. The exploration of this issue not only helps to re-understand the rising role of the manufacturing service in the value chain, but also has important policy implications for China to rely on the manufacturing service to achieve GVC upgrading. Based on the existing methods, this paper uses the latest global input-output table data released by WIOD to effectively measure the service level of the manufacturing industry from the perspective of service input, including relying on domestic service input and foreign service input. On this basis, the panel data model is used to test the impact of different realization paths of manufacturing servitization on GVC upgrading. The research mainly draws the following conclusions: First, the overall result of service-oriented” manufacturing has no significant promotion effect on GVC upgrading. Second, the improvement of the manufacturing service level achieved by relying on domestic service input has a significant impact on GVC upgrading. Third, the improvement of the manufacturing service level achieved by relying on foreign service input will not only produce significant advancement, but also significantly inhibit manufacturing from climbing global value chains. The conclusions have important policy implications. Specifically, relying on manufacturing servitization to achieve GVC upgrading, we should not only pay attention to the overall results of the service-oriented” improvement, but also distinguish between domestic and foreign sources of service input. In summary, to promote the improvement of the service level of the manufacturing industry, we must pay more attention to domestic service input. In this way, we can effectively consolidate the domestic industrial base and reliable industry of the global value chain in the manufacturing industry support. In short, this paper mainly expands the existing research from three aspects: First, starting from the fact of the fragmentation of the service industry, it effectively distinguishes the different paths of the realization of manufacturing servitization, and measures whether the different paths have significantly different impacts on GVC upgrading. Second, in the measurement of the division of labor in the global value chain of manufacturing, it also adopts three measurement methods commonly used so as to make a comprehensive comparative analysis to enhance the robustness and reliability of the research results. Third, based on the above conclusions, we propose optimal path selection of manufacturing sevitization targeting at GVC upgrading.