Topic:

How does the development of the service industry affect the risk exposure of the manufacturing value chain?

Speaker:

Peng Shuijun, Professor, School of Economics, Xiamen University

Host:

Gu Lulu, Professor

School of Finance, Zhongnan University of Economics and Law

Director, Institute of International Investment, Zhongnan University of Economics and Law

Time：

November 29, 2024 (Friday), 3:00 PM - 5:30 PM

Location：

Wenquan South Building, Room 313

Abstract

Promoting the deep integration and development of modern service industries and advanced manufacturing is crucial for driving the transformation and upgrading of manufacturing, as well as enhancing the resilience and security of the manufacturing value chain. This paper empirically examines, using the WIOD database, the impact, pathways, and underlying mechanisms of financial and business service industry development on manufacturing value chain exposure in economies at different levels of development. The study finds that the development of financial services in developed economies significantly reduces production risks for manufacturing that have high demand for financial service inputs, while in developing economies, the development of financial and business services primarily reduces sales risks for manufacturing with high demand for these two types of service inputs. Mechanism analysis shows that the development of financial services in developed economies alleviates financing constraints for manufacturing, attracts high-skilled labor and intellectual capital into manufacturing, enhances manufacturing's ability to diversify imported intermediates, thereby reducing the concentration of import sources for intermediates and lowering production risks. In developing economies, the development of financial and business services expands domestic demand by promoting the scale expansion of downstream industries, increasing household consumption, and improving the domestic circulation system, thus enabling manufacturing products to be sold more domestically, reducing foreign dependence in sales, and lowering sales risks. However, it has less significant effects on attracting high-skilled labor and intellectual capital into manufacturing and enhancing manufacturing's ability to diversify supply and distribution networks. In the case of China, the misallocation of labor due to excessively high wages in monopolistic service sectors may be a key factor contributing to this phenomenon.

Speaker

Peng Shuijun is a Distinguished Professor, Nanqiang Distinguished Professor at Xiamen University, PhD Supervisor, Deputy Dean of the School of Economics, a Changjiang Scholar Distinguished Professor awarded by the Ministry of Education, an expert enjoying special government allowance from the State Council, the Principal Investigator of major projects funded by the National Social Science Foundation, and a recipient of the "New Century Excellent Talents Support Program" by the Ministry of Education. He serves as the Vice President of the Chinese Association of World Economics, the Vice President of the Chinese American Economic Association, the President of the Fujian Association of International Trade and Economic Cooperation, and the Deputy Editor-in-Chief of Xiamen University Journal (Philosophy and Social Sciences Edition). His research interests include international economic theory and policy, international trade and climate change, global value chains and industrial development, and global environmental and climate governance. He has published over 80 academic papers in domestic and international journals such as Social Sciences in China, Economic Research, Management World, The World Economy, China Economic Quarterly, and China & World Economy, Ecological Economics, Economic Modelling, Energy Economics, and The World Economy. His research achievements have won second- and third-class prizes for Excellent Achievements in Scientific Research (Humanities and Social Sciences) from the Ministry of Education, a first-class prize nominated for the National Science and Technology Progress Award by the Ministry of Education, and second- and third-class prizes for Excellent Papers from the "An Zijie International Trade Research Award," the highest award in international trade research in China.

Sponsor

School of Finance, Zhongnan University of Economics and Law

Institute of International Investment, Zhongnan University of Economics and Law