Journal of Management World, 2018, Issue 8

Authors: Lyu Yue, Chen Shuai and Sheng Bin

Abstract: Based on highly refined merged data from the China Intellectual Property Database, China Industrial Enterprise Database, and China Customs Database from 2000 to 2006, this article examines whether and how manufacturing enterprises' integration into the global value chain affects research and development innovation behavior. Research has found that embedding in the global value chain has a significant inhibitory effect on corporate R&D innovation behavior, especially on foreign-funded enterprises, processing and trade enterprises, and high-tech enterprises. Furthermore, this article explores the reasons why the embedding of enterprises in the value chain has not produced the expected technological upgrading effect from three perspectives: excessive dependence on technology spillover, technology absorption capacity, and the "capture effect" of developed countries. At the same time, this article also constructs a causal identification mechanism based on the exogenous impact of China's accession to the WTO, and uses the difference in differences method to examine the independent research and development behavior of enterprises with different levels of value chain embeddedness. It is found that after considering the impact of the WTO, value chain embeddedness still has a significant inhibitory effect on the research and development behavior of manufacturing enterprises, and the inhibitory effect on enterprises with high value chain embeddedness shows an increasing trend year by year. Therefore, to achieve the ascent of the value chain of Chinese manufacturing, it is necessary to continuously improve the technological absorption capacity of enterprises, introduce external competition mechanisms, and participate more deeply in the global governance of international economic and trade rules.

Keywords: global value chain; Low end locking; Research and development patents; technology spillover