Abstract
In the four decades since China’s reform and opening up, China has been playing an active role in global value chain (GVC) due to its abundant resources. China has gained enormous benefits from opening up, but has also suffered huge energy costs in the process. In this study, we incorporated global value chains and energy consumption into a unified analysis framework and calculated the energy total-factor productivity (ETFP) of China’s industry and the degree of participation in GVC. In addition, in order to discover the contradictions and problems between China's participation in global value chains and the improvement of total energy factor productivity, the panel smooth transformation model (PSTR) was used to empirically test the nonlinear relationship between the ETFP and the degree of participation in GVC in China. From the analysis results, GVC participation, as well as the subdivided shallow GVC participation and deep GVC participation, first promoted the effect on ETFP and then suppressed it, showing an inverted U-shaped single threshold characteristic. The results indicated that in the progress of starting to participate in the GVC, the effect of technological progress of the GVC overweighed the scale effect of energy consumption, resulting in the growth of ETFP. However, due to the gradual reduction of technology dividends and the “low-end lock-in” situation, China was placed in the value chain by the developed countries, and the technological effect was gradually smaller than the scale effect of energy consumption. As a result, the increase in the total-factor productivity of energy was inhibited. At the same time, in the further examination of industry heterogeneity, the inverted U-shaped influence trend was more significant in high energy-consuming industries. The conclusions of this study can provide a new perspective and policy focus for China's participation in GVC to achieve the goal of increasing ETFP.
Highlights
Since the 1990s, the global value chain (GVC) has become the new normal for global economic development, greatly changing the form and pattern of international division of labor [1]
We used macrodata from China’s industrial sectors from 2001 to 2014 to analyze the impact of GVC embedding on the total-factor energy productivity. e DEA-Malmquist index method was used to calculate the energy totalfactor productivity (ETFP) of the industrial industry. e GVC participation was divided into two categories, i.e., shallow and deep GVC production activities, and the corresponding participation degrees were measured
E following conclusions can be drawn from the research results: firstly, the ETFP of all the industries except for the pharmaceutical manufacturing industry was less than 1, indicating that the ETFP has been declined in most Chinese industrial sectors, especially in the power, heat production and supply, metal products, extractive industries, and other high energy consumption industries
Summary
Since the 1990s, the global value chain (GVC) has become the new normal for global economic development, greatly changing the form and pattern of international division of labor [1]. For most developing countries, including China, participating in GVC can help improve their technological and industrialization levels, thereby promoting their economic growth. The relevant studies in China and other countries are mainly focused on the following two aspects: firstly, the impact of GVC embedding on total-factor productivity or technological progress was investigated. Through empirical analysis, they concluded that embedded GVCs had significantly improved the productivity of the manufacturing industry in the USA [6]. Marchi et al used the development of Italian furniture industry as an example and reported the important relationship between the participation of GVC and the improvement of environmental performance [11]. E rest of the paper is organized as follows: Section 2 provides the research hypothesis; Section introduces the variables, data description, and model construction; Section 4 explains the empirical results and analysis; Section 5 provides the research conclusions and policy recommendations
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