Chinese Manufacturing Industry Research Articles

How does digital technology affect manufacturing upgrading? Theory and evidence from China

Digital technology becomes the new engine of manufacturing upgrading. The article brings digital technology and manufacturing in global value chain into the same analytical framework, measures development level of digital technology by using World Input-Output Database data, Theoretical analysis shows that impact of digital technology on manufacturing upgrading has innovation effect, resource allocation effect and penetration effect. Empirical test results show that (1) Digital technology level index of China's manufacturing industry increased from 0.286 in 2001 to 0.359 in 2014, The effect of digital technology on upgrading of Chinese manufacturing industry is significant positive at 5% level with influence coefficient of 0.129; Distinguish digital technology sources found that domestic digital technology is used in a large proportion, foreign digital technology is more efficient, the influence coefficients are 0.124 and 0.703 respectively, and both promote upgrading of manufacturing industry; (2) The role of digital technology varies among industries. The promotion effect on capital intensive industries and technology intensive industries is positive at 5% level, and influence coefficients are 0.124 and 0.108 respectively. It has significant positive impact on low-to-medium and medium-to-high technology manufacturing at 1% level with influence coefficients of 0.177 and 0.138 respectively. Therefore, China needs to accelerate deep integration of digital technology and manufacturing industry, and climb to the middle and high end of global value chain.

How does digital technology affect manufacturing upgrading? Theory and evidence from China

Digital technology becomes the new engine of manufacturing upgrading. The article brings digital technology and manufacturing in global value chain into the same analytical framework, measures development level of digital technology by using World Input-Output Database data, Theoretical analysis shows that impact of digital technology on manufacturing upgrading has innovation effect, resource allocation effect and penetration effect. Empirical test results show that (1) Digital technology level index of China’s manufacturing industry increased from 0.286 in 2001 to 0.359 in 2014, The effect of digital technology on upgrading of Chinese manufacturing industry is significant positive at 5% level with influence coefficient of 0.129; Distinguish digital technology sources found that domestic digital technology is used in a large proportion, foreign digital technology is more efficient, the influence coefficients are 0.124 and 0.703 respectively, and both promote upgrading of manufacturing industry; (2) The role of digital technology varies among industries. The promotion effect on capital intensive industries and technology intensive industries is positive at 5% level, and influence coefficients are 0.124 and 0.108 respectively. It has significant positive impact on low-to-medium and medium-to-high technology manufacturing at 1% level with influence coefficients of 0.177 and 0.138 respectively. Therefore, China needs to accelerate deep integration of digital technology and manufacturing industry, and climb to the middle and high end of global value chain.

The double-edged role of the digital economy in firm green innovation: micro-evidence from Chinese manufacturing industry.

The digital economy, which gradually emerged with a new generation of information technologies, has become an unavoidable reality for manufacturing firms in conducting green innovation activities. In this context, using matched panel data at the province and manufacturing firm levels in China during the period 2011-2019 as the sample, this article examines the nonlinear impact of the digital economy on firm green innovation, and further identifies the moderation mechanism of government quality and the heterogeneity of its effects. The two-way fixed-effects model reveals that there is not a simple linear association between the digital economy and firm green innovation as traditionally perceived, but rather an inverted U-shaped relationship that first promotes and then inhibits, which remains robust after applying endogenous and robustness tests. And most provinces have not yet crossed the inflection point; thus, the digital economy overall positively impacts green innovation. Further analysis shows that government quality positively moderates the relationship between the digital economy and firm green innovation, statistically reflecting that the turning point shifts upwards to the right under a higher-quality government. It is worth noting that, when heterogeneity in firm ownership, scale, and region is considered, the inverted U-shaped curve still exists, but the level of the digital economy at the inflection point differs, and the digital economy plays a greater role in promoting green innovation for state-owned, large-scale, or midwestern firms. This research has significant policy implications as it establishes an inverse U-shaped relationship between the digital economy and firm green innovation and indicates that while a firm's green patent output increases with the development of digitalization, it begins to decrease after a limit.

Revitalization of Chinese's manufacturing industry under the carbon neutral goal.

Since the beginning of the Industrial Revolution, the manufacturing industry has been crucial for economic growth. China’s manufacturing activity began after China approved and opened legal reform to the rest of the world in 1978. There are usually three stages of development, including the catch-up period. At the same time, they reflect the private economic sector, manufacturing, and foreign exchange industries, and the opening up to the international markets. This advancement comes along with high energy consumption, leading to a high rate of pollution. Therefore, this study provides a detailed overview of the “Made in China 2025” pilot target and implementations of policies to achieve a carbon-neutral goal. We assessed the efficiency of implementing policies in the Chinese manufacturing sector and recommended decision-making policies to achieve the “Made in China 2025” plan and the 2030 carbon-neutral goal. The Quantitative Strategic Programming Matrix (QSPM) and SWOT analysis matrix were used to put forward some development strategies to transform and upgrade China’s manufacturing industry by combining relevant strategic theories. This study is significant in terms of energy-saving and carbon emission-reducing policy implementations for the Chinese manufacturing industry. In addition, we suggested some measures to achieve a sustainable environment in line with carbon-neutral policies.

Export destination and the skill premium: Evidence from Chinese manufacturing industries

AbstractThis paper examines the relationship between average income of export destinations and the skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within‐industry export share to each destination as weights, and then link it with industry‐level wages and the skill premium. We find that industries that export more to high‐income destinations tend to pay a higher skill premium, suggesting that, on average, skilled workers benefit more from high‐income exports than unskilled workers. Our IV estimates confirm a causal relationship, and the results are robust to various specifications. Further results based on firm‐level data show consistent evidence. Our paper highlights the role of high‐income destination exports in shaping the uneven distributional effects of globalization for different types of workers.

Value Chain and Technology-Based Complexity Analysis of China’s Manufacturing Exports

In recent years, China’s manufacturing industry has developed rapidly, but numerous studies have shown that China is not a manufacturing powerhouse. In recent years, the division of labor in global value chains has been booming, and the Chinese manufacturing industry has been actively integrated into it with its labor cost advantage and achieved rapid development. There is an urgent need to transform and upgrade to high value-added links in the value chain. This paper measures the upstream degree of China’s manufacturing industry through the world input-output table and uses it as an indicator to measure the global value chain status, focusing on the heterogeneous impact of different types of productive services on the upgrading of China’s manufacturing industry’s global value chain status. This study examines the impact of global value chain boundary lessness and institutional quality on the technological complexity of China’s equipment manufacturing exports, using panel data of six types of Chinese equipment manufacturing industries from 2007 to 2018 as a sample. The findings show that intermediate manufactured goods from intermediate imports and intermediate products from developing economies make the strongest contribution to imported intermediate manufactured goods from developing economies. By industry, the impact areas of Graph Visualization (GV) embedding and institutional quality are different. GV embedding has a stronger contribution to the manufacturing of communication, computer, and other electronic equipment, while institutional quality has a stronger contribution to the manufacturing of special office machinery, and the interaction between the two is the same as that of institutional quality.

Servicification and global value chain upgrading: empirical evidence from China’s manufacturing industry

We investigate the effect of servicification on global value chain (GVC) upgrading within the context of China’s manufacturing industry. Utilising comprehensive data on manufacturing value-added, we present new evidence for the influence of servicification on the GVC position of the manufacturing industry in China. We find that although domestic and aggregate servicification enhances GVC, foreign servicification curtails the GVCs of manufacturing firms. Our results show that foreign direct investment, capital intensity and institutions are GVC enhancing. At the same time, the increased global market share of the Chinese manufacturing industry has reduced the GVC of manufacturing firms in China. From a policy perspective, the results highlight the need to take cognisance of the heterogeneity of manufacturing firms and the impact of domestic and foreign servicification on the GVC of manufacturing firms in China. Highlights Total servicification and domestic servicification enhanced the GVC position of Chinese manufacturing industry. Foreign servicification worsened the GVC position of Chinese manufacturing industry. Foreign direct investment, capital intensity and institutions are GVC-enhancing, while increased global market share is GVC-impeding. The GFC exacerbated the adverse impact of foreign servicification on the GVC position of Chinese manufacturing industry.

The role of mineral-related industries in Chinese industrial pattern

Mining industry provides raw materials for economic development, and is a basic industry with strong correlation with other industries. Meanwhile, mining industry possess the feature of “high energy consumption, high pollution and high emissions”. Especially in today's society where environmental protection is increasingly becoming the main theme, it has become an important issue for people to actively coordinate the relationship between mining and environmental protection, and promote the green transformation of mining industry. Combining industrial relationship and complex network, industrial complex network is applied to explore the industrial relevance, which is a perfect method to research industrial pattern. Based on the input-output data of China (1990–2018), this paper constructed the industrial complex network model to describe the evolution characteristics of Chinese industrial pattern. Then we focused on the mineral-related industries, to explore their role and position in Chinese industrial pattern by analysis of network overall and individual indicators and community division. The results show that Chinese industrial network has small world property, and the closeness of various industries is increasing, and the characteristic of industrial clusters ais obvious; The system of Chinese manufacturing industry is becoming more and more perfect and remains an important pillar and foundation of the national economy; Smelting and processing of metals industry plays an important role in connecting the preceding and the following. This paper provides a new perspective for the study of China's mining industry pattern and puts forward corresponding policy suggestions for the adjustment of industrial structure. At the same time, relevant development experience can also serve as a reference for subsequent countries.

The impact of digitalization on supply chain resilience: an empirical study of the Chinese manufacturing industry

PurposeFacing turbulent environments, firms have strived to achieve greater supply chain resilience (SCR) to leverage the resources and knowledge of supply chain members. Both SCR and supply chain integration (SCI) require digitization in the supply chain, but their interrelationships have rarely been researched empirically. This paper aims to uncover the impact of digital technology (DT) on SCR and SCI and the role of SCI in mediating between DT and SCR.Design/methodology/approachChina manufacturing enterprises were surveyed through a Web-based questionnaire, and 96 responses were received. Structural equation modeling was used to test the conceptual model.FindingsThe level of enterprise digitization is not directly related to supply chain resilience, but the level of enterprise digitization has a positive impact on the improvement of SCI and SCI also has a positive effect on SCR. Therefore, SCI has a complete intermediary effect between the level of DT and SCR.Originality/valueThis is a pioneer study to examine the relationships among DT, SCI and SCR. The findings of this study present that firms need to improve DT, SCI and SCR consequently.

How and when responsible leadership facilitates work engagement: a moderated mediation model

PurposeLeaders are under increasing pressure to cultivate an engaged workforce in responsible ways, but how and when responsible leadership is related to employee work engagement remains unclear. Hence, this study aims to unfold the responsible leadership–work engagement relationship by exploring the mediating role of intrinsic corporate social responsibility (CSR) attributions and the moderating role of interactional justice.Design/methodology/approachA multiphase sample of 225 was collected from employees from the Chinese manufacturing industry. Hierarchical regression and PROCESS macro in SPSS were used to test the authors’ moderated mediation model.FindingsThe results demonstrate that responsible leadership is directly related to work engagement and indirectly related to it via employees' intrinsic CSR attributions. Interactional justice significantly strengthens the positive relationship between responsible leadership and intrinsic CSR attributions as well as the mediating effects of intrinsic CSR attributions.Practical implicationsTo cultivate an engaged workforce that improves organizational effectiveness, firms and managers should facilitate responsible leadership, signal sincere motives of CSR activities and enhance fair interpersonal treatment at work. These can also be helpful in various fields (e.g. promoting public trust).Originality/valueBased on social learning theory and attribution theory, this study empirically reveals the role of responsible leadership in enhancing work engagement. It sheds new light on the psychological mechanism and the boundary condition explaining how and when this linkage occurs, which advances research on responsible leadership and the individual-level analysis of CSR.

Repeated partnerships in university‐industry collaboration portfolios and firm innovation performance: roles of absorptive capacity and political connections

There is little empirical evidence on the relationship between repeated partnerships and firm innovation performance in the university‐industry collaboration (UIC) portfolio context. This study investigates how repeated partnerships in UIC portfolios influence focal firms’ innovation performance. Using a panel dataset of 768 UIC portfolios in the Chinese manufacturing industry, we theorize and reveal that repeated partnerships in UIC portfolios exert a negative effect on firm innovation performance. Besides, UIC portfolio repeated partnerships have a positive effect on absorptive capacity and that absorptive capacity partially mediates the relationship between UIC portfolio repeated partnerships and firm innovation performance, and political connections strengthen this relationship. These findings contribute to previous research on repeated partnerships and alliance portfolios, and provide practical implications for both firm managers and policymakers.

Environmental Regulation Intensity, Carbon Footprint and Green Total Factor Productivity of Manufacturing Industries.

In terms of the development of the manufacturing industry, the Chinese government has carried out environmental regulations and set up production standards for related industries. This is an environmentally-friendly and economic action, which is also in line with the requirements of building a green economy for China. Meanwhile, whether from the micro regulatory measures or the macro government policies, carbon emission is an inevitable problem in the study of environmental problems. This paper will explore the impact of environmental regulation on the green economy based on carbon emissions and study the optimal environment regulation intensity that relates to a direct carbon footprint under the maximum green economic benefits. A SBM-MALMQUIST model is established to measure the green total factor productivity according to 27 Chinese manufacturing industries through the MAXDEA software. It is found that the intensity of environmental regulation has a significant impact on green total factor productivity, and direct carbon footprint also exhibits a partial intermediary effect, participating in the mechanism that affects green total factor productivity. Combined with the industrial characteristics and the above research results, this paper puts forward the adjustment strategy of reasonable environmental regulation for the manufacturing industry, which conforms to the national policy guidance, and will be beneficial in promoting the economic development of the green manufacturing industry.

Research on Industry Difference and Convergence of Green Innovation Efficiency of Manufacturing Industry in China Based on Super-SBM and Convergence Models

To accurately grasp the current situation of green innovation efficiency in the manufacturing industry in China, this paper analyzes the differences and convergence characteristics of green innovation efficiency in various industries. Based on the panel data of 29 manufacturing industries in China from 2010 to 2019, the super-slack-based measure (Super-SBM) model measures the green innovation efficiency of manufacturing industries whose evolution characteristics are classified and analyzed from the perspective of technical demand. The Dagum Gini coefficient decomposition method indicates the source of industry differences in green innovation efficiency of the manufacturing industry in China with its convergence characteristics analyzed from the time dimension by constructing σ and β convergence models. The results reveal the improvement of green innovation efficiency of the Chinese manufacturing industry with obvious distinctions among different sectors and the industries with high green innovation efficiency, mostly high-end technology ones. The narrowing overall difference of green innovation efficiency in the manufacturing industry is accompanied by the lowest contribution rate of super-variable density, with the disparities between groups being the main source. It also shows the fluctuation of the intermittent σ convergence characteristics of the national manufacturing industry as a whole and low-end and high-end technology industry groups. However, the entire manufacturing industry and the three groups witness the absolute β convergence trend, with an ununiform convergence rate. The research will provide a reference for further upgrading the efficiency of green innovation in the industry and help to achieve the goals of carbon emission reduction and neutrality with the policy implications for promoting high-quality development of the manufacturing industry.

Relationship between trade enhancement, firm characteristics and CSR: key mediating role of green investment

Organisations are increasingly implementing socially responsible strategies in response to increased rivalry in trade and commercial activities. Organisations are expected to increase their profitability through corporate social responsibility (CSR). Hence, this study investigates the relationship between trade enhancement, firm characteristics, and CSR. Further, this study also explored the critical mediating role of green investment (GI). The data were collected from 456 respondents from manufacturing organisations in China through a questionnaire and analysed by partial least square structural equation modelling (PLS-SEM). PLS-SEM results revealed that trade enhancement has a significant positive effect on CSR and GI. GI also has a significant effect on CSR. In comparison, firm characteristics do not have a substantial impact on CSR and GI. However, GI significantly mediates the relationship between trade enhancement, firm characteristics, and CSR. This study provides insights to managers and stakeholders regarding GI and CSR in the Chinese manufacturing industry. Lastly, this study proposes theoretical and practical implications andoffers valuable information for practitioners and policymakers.

Convergence or divergence? The effects of economic openness on low-carbon innovation in Chinese manufacturing industry.

Low-carbon innovation can address both economic and environmental concerns; patterns of low-carbon innovation convergence can determine the effectiveness of mitigating the adverse consequences of climate change. Considering that economic openness has a huge impact on the development of innovation capability, this paper uses a conditional β convergence model to examine the convergence of low-carbon innovation in Chinese manufacturing industry and its relationship with economic openness. We incorporate the spatial spillover effect into the convergence function by constructing spatial error model, spatial lag model, and spatial Durbin model. Based on a panel data set of 30 Chinese provinces over the period 2004-2016, the results show that low-carbon innovation in Chinese manufacturing industry has a strong feature of conditional β convergence. The convergence rate of low-carbon innovation is slightly slowed down by economic openness, and the main reason is that the spillover effect is weak and the convergence rate is slow in lower open areas, so the convergence rate of the whole country is slowed down by that of the lower open areas. Although the economic openness in adjacent areas can contribute to the development of local innovation ability, but generally speaking, economic openness in local areas takes a stronger effect in promoting the convergence of low-carbon innovation than that in adjacent areas. The findings have important policy implications as they suggest the need for a more equal degree of economic openness among Chinese provinces to speed up the convergence of low-carbon innovation.

A system dynamics model of green innovation and policy simulation with an application in Chinese manufacturing industry

Green innovation is fundamental for the achievement of a "win-win" state between economic growth and environmental protection. Pivotal to maintaining the vitality of green innovation is the effectiveness of government policies. First, this paper develops a theoretical model to capture the structure of a green innovation system, incorporating five subsystems: government, environment, technology, economy, and energy subsystems. It further explores the transmission effects of the five subsystems of green innovation systems between government policy-related actions and green innovation. Second, a causal loop diagram of green innovation is constructed to analyse how government fiscal, tax, financial, technical, and environmental policies influence green innovation through these subsystems and other relevant variables. Third, taking the Chinese manufacturing industry as an example, this work builds a stock and flow model that can more clearly reflect the relationships among all variables in a green innovation system. Then, it calculates the quantitative relationship between different variables in the model. Model effectiveness is verified by historical data and sensitivity analysis. Finally, based on the above work, this study simulates the evolution of the green innovation system in the Chinese manufacturing industry by changing the variables of fiscal, tax, financial, technical, and environmental policies. The results show that different types of policies and differentiated implementation strengths have varied impacts on the green innovation performance of the manufacturing industry. There is a synergistic relationship between different types of policies, implying a higher-level effectiveness of policy orchestration compared to the use of separate policies. This paper generates valuable implications for the government for formulating and optimizing green innovation policies.

Big data analytics as a roadmap towards green innovation, competitive advantage and environmental performance

Big data analytics (BDA) have been emerged as an important instrument to support firms suffering from sustainability issues. BDA could enhance environmental performance of the manufacturing sector but empirical studies on it lack in literature. This research explores the role of BDA in boosting green innovation (GI), competitive advantage (CA), and EP in the Chinese manufacturing industry. A survey method was employed to collect primary data, and study hypotheses were evaluated using Structural Equation Modeling (SEM). The results showed that BDA supports in achieving CA and EP. GI and green HRM practices (GHP) positively contribute toward CA through corporate green image (CGI). This study also confirmed the mediating role of GI, GHP, and CA and the moderating role of organizational commitment (OC) and corporate green image (CGI) in the underdeveloped context of the Chinese manufacturing industry. This research contributes to the literature by introducing possible mediators and moderators between the relationship of BDA and EP. Chinese manufacturing sector needs to develop appropriate measures to combat sustainability issues and to boost the adoption of BDA.

The Influence of Industrial Structure Upgrade on Coupling and Coordinated Development-Empirical Analysis From Chinese Pharmaceutical Manufacturing and Pharmaceutical Service Industries.

The degree of coupling and coordination between the pharmaceutical manufacturing industry and the medical service industry crucially requires improvement by promoting the development of the pharmaceutical manufacturing industry through industrial structure upgrading to narrow the gap between them. First, this article uses the coupling coordination degree model to measure the coupling coordination degree of the Chinese pharmaceutical manufacturing industry and medical service industry; then, it theoretically analyzes the mechanism through which upgrading the pharmaceutical manufacturing industry's industrial structure can improve the coupling coordination degree. Finally, we empirically test the impact of upgrading the pharmaceutical manufacturing industry's industrial structure on the coupling and coordination degree between it and the medical service industry. The main conclusions are as follows: (1). The quantile regression model shows that having an advanced pharmaceutical manufacturing industry positively affects its coupling and coordination with the medical service industry; (2). A threshold regression model is tested, and it is found that only when the pharmaceutical manufacturing industry reaches an advanced level can it significantly promote joint and coordinated development with the medical service industry; (3). Rationalizing the pharmaceutical manufacturing industry structure will inhibit a high level of coordination between it and the medical service industry and their coordinated development.

Input Digitization of Manufacturing Industry and Upgrading in GVC: Reexamination based on the Difference of Input Source

The digital wave drives the reconstruction of GVC and provides manufacturing enterprises with an opportunity to achieve GVC upgrading. How to fully release the digital effect and help enterprises break through the low-end lock-in dilemma in GVC has become an important issue. Through the literature review, it is found that the advanced attributes of digital elements and their trade growth effects have been basically recognized in theory. Unfortunately, more convincing quantitative research and micro evidence are scarce. The more critical problem is that the “globalization” and “fragmentation” production characteristics of digital elements directly break the source structure that digital input is limited to domestic.Under the background of the increasing risk of global value chain rupture, ignoring the important role of the digital elements of “other countries” and paying general attention to the effect of digital trade income are prone to lead to wrong conclusions.This paper fully considers the national attribute of digital investment, and comprehensively and objectively evaluates the digital effect. At the theoretical level, drawing on the research framework of Kee and Tang （2016）, this paper decomposes the different performance of digital input from different sources in the process of creating domestic value added ratio in exports （EDVAR）. At the same time, based on the WIOD input-output database, China’s industrial enterprise database and customs import and export database, this paper empirically tests the micro effect of domestic and foreign digital input on EDVAR.The results show that domestic digital investment has a significant role in promoting EDVAR, while foreign digital investment has a significant inhibitory effect on EDVAR. Input digitization affects EDVAR through cost plus and innovation channels, and depends on digital input from different sources, which has different performance in each channel. Digital trade barriers further aggravate the inhibition of foreign digital investment on EDVAR.The research conclusions provide empirical evidence and policy basis for advocating Chinese manufacturing industry to walk out of the independent and controllable digital path and realize the “curve transcendence” of high added value creation. Specific policy implications include strengthening the domestic digital industry support of enterprises in GVC division; taking the cultivation of domestic digital industry as the goal, strengthening the strategic design of digital trade, and accurately introducing the core technology with the effect of supplementing the chain, extending the chain and strengthening the chain; advocating the digital trade liberalization and division of labor and cooperation, and reducing the flow barriers and procurement costs of cross-border digital elements.

The Role of Value Appropriation Capability of Chinese Multinationals in Operating Cross-Border Business Models

In an ever increasingly competitive and unstable global market, multinational corporations (MNCs) are greatly pressurised to use inherent capacities and develop effective cross-border business models (CBMs) that can transform value into the desired outcome. Amid high uncertainties, MNCs are required to develop some critical capabilities to operate CBMs to the best of their ability. More specifically, it is vital for MNCs to have a unique capability that enables them to more effectively synergise with these commonly recognised capabilities (e.g., technological innovation capabilities (TIC) and marketing capability (MC) alongside the global value chain (GVC)) to sustain balance among and gain profits with stakeholders. From the literature review, we first identified value appropriation capability (VAC) as one of the most important capabilities and thereby developed three hypotheses. Based on the hypotheses, we investigated how VAC efficiently moderates MNCs’ capabilities to appositely operate CBMs. Then, empirical panel data between 2011 and 2019 in the Chinese manufacturing industry were used to examine the hypotheses. The results reveal that VAC, TIC and MC positively impact MNC performance. Moreover, VAC–TIC interaction significantly improves MNC performance, and VAC–MC interaction positively improves MNC performance. Our findings provide novel insights into the CBM literature by examining the importance of VAC for operating CBMs alongside its multifaceted effects on MNC performance, especially in times of uncertainty.