Mechanism for Producer Services to Upgrade Value Chain from the Perspective of Spatial Networks

ABSTRACT

The study aimed to analyze the function mechanism for producer services to upgrade value chain based on spatial networks, with regional domestic Export Sophistication Index for measuring the position of China’s provinces in the global value chain. Using spatial econometrics model, the study set up a variety of spatial weight matrices, to empirically test the spatial networks’ effect as a result of the producer services with changes in the positions of China’s various provinces in the global value chain. Results indicate that: first, the producer services have an obvious spatial networks effect on upgrading of the various parts of China in the global value chain. Second, the estimated results of distance based spatial weights matrix model were contiguity based spatial weights matrix results, implying that space network effect is not limited to the neighboring provinces. Third, the spatial network effect of economic based weights matrix model was stronger than distance based spatial weights matrix model, which shows that today, the changing value chain of Chinese provinces is more inclined to “regional powerful combination”, rather than “regional strength complementary”.

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