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Upgrading Industries through Globalization: The Case of China

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  • Zhang, Kevin H.

    (Department of Economics, Illinois State University, Illinois, USA)

Abstract

Industrial upgrading (IU), the stepwise development of manufacturing skills from simple to more complicated tasks, is a must for emerging economies to achieve sustainable growth. How does globalization affect IU? This paper aims to answer the question with evidence from a panel dataset of Chinese regions in 2005-2015. Globalization is measured by foreign trade and foreign direct investment, and IU is captured by industrial capacity and industrial technology in both domestic and global markets. Estimate results suggest that (a) globalization fuels more IU; (b) globalization promotes China’s IU mainly through raising industrial capacity and technology; (c) FDI seems to be more important in high-tech manufacturing activities; and (d) benefits from globalization depend on domestic absorptive capacity in terms of infrastructure, R&D, and human capital. La modernizzazione dell’industria attraverso la globalizzazione: il caso della Cina La modernizzazione dell’industria, cioè il graduale sviluppo delle capacità industriali da semplici competenze a specializzazioni più complesse, è obbligatorio per le economie emergenti al fine di realizzare una crescita sostenibile. Qual è l’influenza della globalizzazione sulla modernizzazione dell’industria? Questo articolo cerca di rispondere a questa domanda con evidenze dai dati panel relativi alle regioni cinesi nel periodo 2005-2015. Il livello di globalizzazione è dato dal commercio estero e dagli investimenti diretti esteri e la modernizzazione dell’industria viene calcolata tramite la capacità e la tecnologia industriale, sia nel mercato interno che in quello globale. I risultati ottenuti indicano che: a) la globalizzazione alimenta la modernizzazione dell’industria; b) la globalizzazione promuove la modernizzazione dell’industria in Cina, prevalentemente tramite l’aumento della tecnologia e della capacità industriale; c) gli IDE sembrano essere più importanti nelle attività di produzione ad alta tecnologia; d) i benefici dovuti alla globalizzazione dipendono dalla capacità interna di rispondere alla richiesta di infrastrutture, R&S e capitale umano.

Suggested Citation

  • Zhang, Kevin H., 2021. "Upgrading Industries through Globalization: The Case of China," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 74(4), pages 439-462.
    • Handle: RePEc:ris:ecoint:0907
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    References listed on IDEAS

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    1. Kevin Honglin Zhang, 2015. "What Drives Export Competitiveness? The Role Of Fdi In Chinese Manufacturing," Contemporary Economic Policy, Western Economic Association International, vol. 33(3), pages 499-512, July.
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    8. Pack, Howard, 1988. "Industrialization and trade," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 9, pages 333-380, Elsevier.
    9. Alla Lileeva & Daniel Trefler, 2010. "Improved Access to Foreign Markets Raises Plant-level Productivity…For Some Plants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1051-1099.
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    More about this item

    Keywords

    Globalization; Industrial Upgrading (IU); Foreign Trade; Foreign Direct Investment (FDI); Absorptive Capacity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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