本文將國際垂直分工引入Melitz and Ottaviano (2008)模型，探討代工廠商創新升級之相關議題。因爲高生產力廠商能承擔自創品牌的採行成本，且循代工升級的獲利空間有限，故最可能自創品牌。據此，本文探討後進廠商的長期發展與產業動態。首先，當採行成本夠高，自創品牌並不抵觸品牌夥伴的利益，故不會遭受抵制；其次，OBM品牌對市場的影響決定於廠商的異質性程度，當生產力差距夠大，市場結構不穩定，低生產力品牌將被OBM品牌取代。反之，市場結構穩定，新舊品牌和平共存。最後，自創品牌的採行成本下降有助於產業轉型升級，有較高比例的廠商跨足到品牌經營。

We introduce international fragmentation of production processes in the Melitz and Ottaviano (2008) model. We do so to explore perspectives on innovation upgrades in subcontractor firms. We first demonstrate that high-productivity firms are the firms that are most likely to develop into own-brand manufacturing (OBM) players. Such firms profit little from subcontracting upgrading and can afford the fixed cost of adoption. We then embed our results in a dynamic setting to address questions on the long-term evolution of latecomer firms and industrial dynamics. When adoption costs are high enough, a brand vendor can benefit from the OBM strategy of its partner, and consequently, does not boycott collaborative upgrades as retaliation. Furthermore, the impact of OBM strategies on market structure is demonstrated to depend on the extent of productivity heterogeneity. Market structure is unstable and low-productivity incumbents will be replaced by OBM players if productivity is heterogeneous enough. By contrast, old and new brands can coexist in a stable market. Finally, an exogenous decrease in the fixed cost of adoption can expedite subcontractor adoption of the OBM strategy. This may persuade a higher fraction of OBM players to join.