Research on China's Manufacturing Industry Upgrading and Its Influencing Factors Based on Improved Grey Relational Model

Abstract

Based on the world input-output database, the upstream degree index was used in this paper to measure the global value chain position of China's manufacturing industry from 2003 to 2013. Then, the traditional grey relational model is improved to explore the difference of the influence degree of endogenous and exogenous factors on the global value chain position of China's manufacturing industry, including human capital, technological innovation level, enterprise scale, foreign direct investment, outward foreign direct investment, producer services and government subsidy. The empirical result shows that the overall upstream degree of China's manufacturing industry has steadily increased in recent years. The technological innovation level plays the most important role in promoting the GVC position, the FDI and government subsidy have a relatively strong impact, while the impact of producer services is relatively small at this stage.