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How Does Manufacturing Digitization Affect Global Value Chain Upgrading?
ZHANG Yanping1, LING Dan1, LIU Huiling2
1. School of Economics, Wuhan University of Technology, Wuhan 430070, China; 2. School of Economics, Zhengzhou University of Aeronautics, Zhengzhou 450046, China
Abstract Based on cross-country panel data from 66 countries and 17 manufacturing industries worldwide, this paper establishes a mathematical model from the perspective of digitalization of intermediate inputs to examine the impact of manufacturing digitalization on global value chain upgrading. Research findings indicate that manufacturing digitalization has a significant positive impact on its global value chain position, and this conclusion remains valid after a series of robustness checks. Mechanism analysis shows that the supply-side cost effect, specialization effect, and human capital effect, as well as the home market scale effect on the demand side, all play important roles in the impact of digitalization on manufacturing GVC upgrading. Further decomposition of the cost effect into labor and trade cost effects reveals that while they differ in their intermediary roles in GVC upgrading, both promote GVC upgrading by saving costs. Heterogeneous analysis manifests that digitalization has a more pronounced effect on improving the global value chain position of manufacturing in developing economies, in industries with high digital intensity and in high-tech manufacturing. Moreover, compared to non-core digital sectors, intermediate inputs from core digital sectors have a stronger value chain climbing effect. The conclusions provide specific reference basis for studying relevant countermeasures such as the manufacturing industry climbing to the high end of the global value chain and improving the quality of international cycles.