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RSS FeedsSustainability, Vol. 11, Pages 4527: Financial Constraints, Trade Mode Transition, and Global Value Chain Upgrading of Chinese Firms (Sustainability)


21 august 2019 16:04:02

Sustainability, Vol. 11, Pages 4527: Financial Constraints, Trade Mode Transition, and Global Value Chain Upgrading of Chinese Firms (Sustainability)

China is facing the serious problem of ‘low-end locking’ in the global value chain as it becomes deeply integrated into world trade. Deciphering how to upgrade Chinese enterprises’ positions in the global value chain is crucial to China’s economic transformation and sustainable development. This study explores the feasibility of upgrading China’s global value chain from the perspective of financial constraints. Based on a theoretical framework, this study applies firm-level production data and trade data, using a documented method of measuring domestic value added at the firm level. Besides, we apply three methods to comprehensively measure the financial constraints faced by enterprises. In our study, we verify the findings of previous empirical studies that reducing financial constraints can significantly increase enterprises’ domestic value added, and this conclusion remains valid after considering various robustness tests. Our heterogeneity analysis indicates that easing financial constraints can significantly contribute to Chinese private enterprises’ upgrade in the global value chain, which could be related with “ownership discrimination” of Chinese banks. Finally, this study analyses the two mechanisms by which relaxing financial constraints could promote global value chain upgrading: (i) directly transfer enterprises’ trade mode from processing trade to general trade and (ii) allowing enterprises to climb up in the global value chain. Digg Facebook Google StumbleUpon Twitter
43 viewsCategory: Ecology
Sustainability, Vol. 11, Pages 4528: How to Transition from Cooperations to Cooperatives: A Case Study of the Factors Impacting the Organization of Urban Gardeners in Benin (Sustainability)
Sustainability, Vol. 11, Pages 4526: Comparative Analysis of Multi-Criteria Methods for the Enhancement of Historical Buildings (Sustainability)
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