The Influence of Intermediate Goods Import on Total Factor Productivity of China in Global Value Chains

In recent years, depending on processing trade modes, China’s participation in division system of global value chains deepens increasingly, and Chinese enterprises’ behaviors of importing intermediate goods are gradually increasing. In order to study the effect of imported intermediate goods, based on the merged data of Chinese industrial enterprises and customs statistics from 2000 to 2006 and from the perspectives of different export intensities, this paper uses OLS and GMM to investigate the effects of the import of intermediate goods on total factor productivity of the enterprises. Then it employs propensity score matching and difference-in-difference methods to make a robustness test. The results show that the import of intermediate goods in domestic enterprises and export enterprises has a positive effect on total factor productivity, and the effect is more significant in the domestic enterprises. When the export enterprises are divided into generally export enterprises and purely export enterprises, the promotion role of the import of intermediate goods in total factor productivity is diminishing by the orders of domestic enterprises, generally export enterprises and purely export enterprises. Greater proportion of processing trade enterprises in export enterprises is the main reason for the conclusions above. Furthermore, the results of heterogeneity test show that the effect of imported intermediate goods on total factor productivity is even obvious when enterprises own strong technical absorptive capacity and import from developed countries, or the enterprises themselves are foreign-funded. It not only provides a new perspective for the objective evaluation of the effectiveness of Chinese enterprises in the import of intermediate goods, but also offers useful policy enlightenment for governments’ current promoting the import” strategy adjustment and future promoting the import” strategy implementation.