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The Favorable Interaction of Firms' Innovation and Market Power Formation in Global Value Chain

ZHANG Xiao-di,ZHU Qin(College of Economics,Zhejiang University,Hangzhou 310027,China)  
Nowadays the new pattern of international division is global value chain,in which the exporters and importers engage in a series of value-added activities of production and input various and mixed factors in each "tache".Based on the fact that Chinese firms are empty of market power and the multinational corporations from developed countries are in the leading position in global competition generally,our enterprises are faced with disadvantageous situation,it means that they have to be locked in the reach of low profit in value chain,share in the benefit from international division so unfairly,and depend on import seriously in order to have technologies etc.If our nation's enterprises can form and strengthen the market power,then their motivation and capability of innovation will be improved,and the disadvantageous situation will be changed too.This paper studies the mechanism of favorable interaction between firm's innovation and market power theoretically,furthermore,it put forward the ideas and measures how to form the favorable interaction mechanism in three types of levels of "tache","chain",and "cluster".
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