Differing Effects of Intra-Product International Division of Labor on Technological Progress

Wang Yanmei 1 and Jian Ze 2
1 Institute of Industrial Economics, Chinese Academy of Social Sciences, Beijing, China
2 School of Economics and Management, Tongji University, Shanghai, China

Abstract:  This paper has identified two models of intra-product international division of labor: the model of passive inclusion and the model of proactive participation. Their difference is essentially whether participation in international division of labor is dominated by multinational firms or by local firms. At the level of representative sectors, somecharacteristic variables of participation in international division of labor demonstrate significant industry differences. Models of division of labor affect technology progress. According to the empirical analysis result at the micro-level of four sectors, no matter for export or the contribution of learning by doing to corporate technology progress, the model of proactive participation is superior to the model of passive inclusion; under the model of passive inclusion, the technology spillover effect of import is smaller than “learning by doing” effect; under the model of proactive participation, technology spillover effect is over two times the “learning by doing” effect.
Keywords: intra-product international division of labor, technology progress, China’s manufacturing sector, competitive advantage

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