Internal Drivers and the Specialization Status of Under-developed Countries: Evidence from China's High-tech Industry

This study incorporates value-added ratio （VAR） and productivity into the analytical framework of intra-product specialization （IPS） as a globally comparable index for international specialization status （ISS）, to analyze the effect of domestic technological innovation, labor force investment, capital investment and foreign direct investment （FDI） spillovers on the ISS of developing countries. It also tests the effects empirically against the data from Chinese high-tech industries and enterprises. The results show that domestic technological innovation and the improved coordination of material capital and human capital are key internal drivers in the improvement of the ISS of Chinese high-tech industries, whereas FDI spillovers play a relatively limited role therein. Therefore, the key to China＇s industry upgrading is to tap and nurture the internal motive forces rather than to rely on FDI spillovers.

China reshapes the East Asian production network

From the perspective of intra-product specialization and with in-depth analysis of trade statistics,this paper investigates the influence of China's rise on the East Asian production network.Our conclusions suggest that in integrating into the East Asian production network,China has gradually emerged as the manufacturing center of East Asia,weakening the regional influence of the Four Asian Tigers.Meanwhile,the competitive effect of China's rise has helped promote the specialization levels of the network's members and even the network as a whole.With cooperation in various processes of intra-product specialization,internal connections of the East Asian production network were further strengthened.In addition,China became an export platform of East Asia,transforming the export pattern of the East Asian production network to world markets from "bilateral trade" into "triangular trade," trade via China.

Global Value Chains, Horizontal Intra-lndustry Trade and the Heterogeneous Firm

This paper examines global value chains at the level of the heterogeneous firm. The context is a world of horizontal intra-industry trade, characterized by imperfect competition and product differentiation at the firm level. Standard microeconomic tools are employed to assess the effects of inter-firm dissimilarities in both demand and supply on firms＇ responses to changes in trade policy. In this set-up, dissimilarities in firm characteristics play roles similar to factor endowments and technology differences in traditional trade models. When cross-border production sharing （＂fragmentation＂） is introduced into this framework, those differences in firm characteristics determine the degree to which individual firms will enter into production networks. In this context, horizontal and vertical intra-industry tradel elements interact in their effects on firm decisions. Traditional comparative advantage considerations still govern the choice of off-shored activities, while direct competition between imports and exports expands the range of possible outcomes. Finally, it is shown that cross-border production sharing reduces the sensitivity of firms to variations in exchange rates, matching a phenomenon that has been observed in traditional country-level models.