Exploring the Upgrading of Chinese Automotive Manufacturing Industry in the Global Value Chain: An Empirical Study Based on Panel Data

In the age of globalization, the upgrading of China's manufacturing industries has attracted great attention from both academicians and practitioners, as it certainly has great implications for the development of China and, even further, for the development of the whole world. To address this issue, the study clarifies the effects of the internal technological innovation capability (ITIC) and external linkages (ELs) on upgrading the Chinese automotive manufacturing industry (CAMI) in the global value chain, in order to indicate the appropriate way for the CAMI to be further upgraded and provide references for the formulation of regional automotive industrial policies. Based on Chinese panel data, the results confirm that both ITIC and EL are important for the upgrading of the CAMI, with ITIC being the more important. Improvement of ITIC facilitates the industry's cooperation with the EL, resulting in better knowledge access. Furthermore, the results of cluster analysis reveal that regions with relatively developed automotive industries place emphasis on both the ITIC and EL. However, in some regions (e.g., Shanghai and Chongqing), the utility of EL seems insufficient. Therefore, the results of this paper, on the one hand, suggest policies should be directed towards increasing the ITIC of CAMI. On the other hand, in some regions, managers and policymakers need to explore further the advantage of clustering.