Abstract: With the deepening of China's integration into the global production network, the competitive effect of trade liberalization and the optimal allocation of resources among different productivity enterprises have promoted the overall markups of export enterprises in a country. However, it is contrary to the previous research. This paper uses Chinese firm-level data to verify from the perspective of GVCs embedding. The result shows that participation in GVCs has effectively increased markups on the whole, but there is an "inverted u-shaped" relationship between them,meanwhile the influence of different enterprise types is heterogeneous. Further analysis of the influence mechanism shows that enterprises' participation in GVC will improve markups through technology spillover effect and large market effect, but the cost saving effect will play a limited role and have a negative impact with further integration into GVCs.

Key words: embedded in GVCs, markups, inverted u-shape, mechanism test