The best choice of embedding producer service resources in the manufacturing sector: from the perspective of upgrading the export sophistication of intermediate inputs

LIU Hui1 CHEN Xiaohua1 JIANG Mobing1

(1.School of Economics and Management, Zhejiang Sci-Tech University, Hangzhou, China 310018)

【Abstract】Combining the fact of low sophistication of intermediate inputs and inefficient producer service resources in China with the conclusion by Zhang and Liu (2018) that producer service contributes to the improvement of intermediate production capacity and sophistication, we have the following doubt. How can producer service be embedded in the manufacturing sector to effectively promote the export sophistication of intermediate inputs? Improving the sophistication of intermediate inputs and the efficiency of producer service is fundamental to improving the quality of China’s economic growth and achieving the strategy of shoring up weakness. Therefore, it is urgent to dig into the effect of producer service resources embedded in the manufacturing sector on the export sophistication of intermediate inputs. Our main conclusions are as follows. When producer service resources are embedded in the manufacturing sector too upstream or downstream, they will adversely affect the export sophistication of intermediate inputs. However, when producer service resources are embedded in the midstream of the manufacturing sector, their effect on the export sophistication of intermediate inputs is positive and optimal. Therefore, the embeddedness of producer service resources in the manufacturing sector has an inverted U-shaped effect on the export sophistication of intermediate inputs, and growth rate fluctuation, tax shocks and external negative shocks cannot change the inverted U-shaped mechanism. In addition, the export sophistication of China’s intermediate inputs needs to be enhanced, since the export sophistication of manufacturing and producer service intermediate inputs is lower than that of both developed and some developing countries. Our major contributions are as follows. First, we analyze the effect of producer service resources on the export sophistication of intermediate inputs from the perspective of embeddedness for the first time by effectively connecting export sophistication, producer service resources and intermediate inputs through the section preference. Second, we deepen the research in the field of export sophistication and intermediate inputs, extend the research of export sophistication from final products to intermediate products, and extend the study on intermediate products from quantity to sophistication. Third, we modify the measurement process of Antràs et al. (2012) and Hausmann et al. (2007) to provide two relatively reliable and scientific analysis tools for further research in this field.

【Keywords】 producer service resources; manufacturing section; intermediate inputs; export sophistication;

【DOI】

Download this article

This Article

ISSN:1001-9952

CN: 31-1012/F

Vol 46, No. 07, Pages 154-168

July 2020

Downloads:0

Share
Article Outline

Abstract