Li Ronglin:Rising of Labor Cost,Position of VC and Promotion of Product Quality

Date of publication:2016-9-17There have been0A reader to read the article

Rising of Labor Cost, Position of Value Chain and Promotion of Product Quality

Abstract    Under the conditions of international production fragmentation, the production chains of products are allocated among the developed and developing countries. Companies have to make comprehensive considerations of the comparative advantages, trade costs and quality producing costs in the production, so as to decide the status and output quality of the participating country in the division of value chain. The rising of labor cost would result in the changes of the output quality of the participating country. If the production of a developing country is positioned at the downstream links, its output quality would be negatively affected, the “lock-in effect” is formed; if it is located at the upstream links, positive effect is generated, and the “crowding-ineffect” is formed. The industrial data of China’s manufacturing industry has verified the main conclusions of this paper.


This paper is published in Contemporary Finance & Economics, No.9, 2016.