EconPapers    
Economics at your fingertips  
 

Functional Upgrading in China's Export Processing Sector

Ari Van Assche and Johannes Van Biesebroeck ()

No 11967, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain that require a higher skill content. In this paper, we analyze if there is evidence of this type of upgrading in China's export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000-2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000-2006, both overall and within product categories. Furthermore, we find that this trend has gone hand-in-hand with improvements in a sector's labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006-2013.

Keywords: global value chains; industrial development; Manufacturing (search for similar items in EconPapers)
JEL-codes: D2 F1 L2 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-int and nep-tra
Date: 2017-04
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11967 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Functional upgrading in China's export processing sector (2018) Downloads
Working Paper: Functional upgrading in China’s export processing sector (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11967

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=11967

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-12-10
Handle: RePEc:cpr:ceprdp:11967