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Domestic segment of global value chains in China under state capitalism✰

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  • Tang, Heiwai
  • Wang, Fei
  • Wang, Zhi

Abstract

This paper studies the relationship between the changing domestic segment of global value chains and the return of state capitalism in China. To this end, we propose a method to estimate an extended input-output (IO) table that tracks inter-sector transactions between different types of firms in a domestic economy. The method is an application of constrained optimization, which relies on basic information from a country's national IO table, as well as sector- and firm-level data. We also propose a way to construct bootstrapped standard errors for any global value chain (GVC) measures estimated from the extended IO tables. We then use the extended IO table to study the domestic segment of GVC in China. We find that, not only is state-owned enterprises’ (SOEs) domestic value-added to gross exports ratio much higher than those of other firms, but it also increased significantly from 1.2 in 2007 to 1.7 in 2010. Our findings suggest that, even after years of privatization, SOEs still play an important role in shaping China's exports.

Suggested Citation

  • Tang, Heiwai & Wang, Fei & Wang, Zhi, 2020. "Domestic segment of global value chains in China under state capitalism✰," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 797-821.
    • Handle: RePEc:eee:jcecon:v:48:y:2020:i:4:p:797-821
    DOI: 10.1016/j.jce.2020.04.002
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    4. Yuping Deng & Yanrui Wu & Helian Xu, 2023. "Emission reduction and value‐added export nexus at firm level," The World Economy, Wiley Blackwell, vol. 46(6), pages 1670-1710, June.
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    7. Duan, Yuwan & Dietzenbacher, Erik & Los, Bart & Yang, Cuihong, 2021. "How much did China's emergence as “the world's factory” contribute to its national income?," China Economic Review, Elsevier, vol. 69(C).
    8. Yuping Deng & Yanrui Wu & Helian Xu, 2022. "Emission Reduction and Value-added Export Nexus at Firm Level," Economics Discussion / Working Papers 22-19, The University of Western Australia, Department of Economics.
    9. Baris, Kristina & Crisostomo, Ma. Charmaine & Garay, Krizia Anne & Jabagat, Christian Regie & Mariasingham, Mahinthan & Mores, Elyssa Mariel, 2022. "Measuring Localization in the Age of Economic Globalization," ADB Economics Working Paper Series 647, Asian Development Bank.

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    More about this item

    Keywords

    Value-added trade; Global value chains; Quadratic optimization; Intra-national trade; State capitalism;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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