Abstract
The paper used the panel data from 2000 to 2014 of 9 developing economies to research the effect of FDI on GVC-participation of host countries and International Division of Labor Trap from the two dimensions of theory and demonstration. And further researches are carried on, which shows that FDI is beneficial of deepening GVC-participation of developing host countries. Furthermore, FDI has solidified the international division of labor by driving the developing host countries participate into the international production system leading to be fallen into the trap of international division of labor.FDI has solidified the level of international division of labor in developing host countries through the pre embedded "GVC", and the backward embedding of GVC is good for the separate developing host countries from the bottom Division. Among the three mechanisms,Scale effect and cluster effect could not be beneficial for developing host countries to separate from the bottom of Division. The learning by doing effect and path locking effect in Inherent division of labor further lead to be fallen in the international division of labor trap.
Highlights
With refinement of international division, the international production system has deeply developed, and FDI has already been an important tool
The entry of FDI is not conducive to the development of the host country to the high-end of GVC and will lead to the development countries trapped in the international division of labor trap
Using the panel data of 9 developing economies for 2000-2014 years, this paper studies the influence of FDI on the GVC participation of the host country
Summary
With refinement of international division, the international production system has deeply developed, and FDI has already been an important tool. The presence of FDI has deepened the participation of the "GVC" in the Middle East and plays an important role in exports structure and international division of labor of host countries. According to the analysis above, the paper focuses on that host countries are embedded into GVC by FDI and the role of FDI playing in the promotion of the international division of labor in developing host countries. Considering that the fact of developing countries has fallen into the trap of international division of labor for a long time, whether FDI has played a role or not could be a question. The paper studies the relationship between FDI and the developing host countries fallen into the trap of international division of labor
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