TY - JOUR
T1 - Does digitalization spur global value chain participation?
T2 - Firm-level evidence from emerging markets
AU - Gopalan, Sasidaran
AU - Reddy, P Ketan
AU - Sasidharan, Subash
N1 - Funding Information:
We thank the Editor, Associate Editor, and two anonymous referees for their insightful comments and suggestions.
Publisher Copyright:
© 2022 The Author(s)
PY - 2022/6
Y1 - 2022/6
N2 - Does digitalization by firms spur participation in Global Value Chains (GVCs)? Rapid strides in information and communication technology (ICT) through cost-effective and reliable telecommunications have facilitated multinational firms to outsource complex production activities across borders over the years. While the rise of GVCs to prominence has coincided with the ICT revolution, there is very little systematic empirical evidence at the firm-level documenting the nexus between digitalization of firms and their participation in GVCs. By using rich firm-level data for a sample of 24,839 firms across 52 countries spanning the period 2006–2018, we empirically test the importance of digitalization in deepening GVC participation. After correcting for potential biases arising from self-selection and reverse causality, our empirical analysis shows that digitalization by firms positively influences GVC deepening. Our results are quite robust to various measures of GVCs and digitalization. Further, we also document how digitalization boosts GVC integration of firms that are financially constrained.
AB - Does digitalization by firms spur participation in Global Value Chains (GVCs)? Rapid strides in information and communication technology (ICT) through cost-effective and reliable telecommunications have facilitated multinational firms to outsource complex production activities across borders over the years. While the rise of GVCs to prominence has coincided with the ICT revolution, there is very little systematic empirical evidence at the firm-level documenting the nexus between digitalization of firms and their participation in GVCs. By using rich firm-level data for a sample of 24,839 firms across 52 countries spanning the period 2006–2018, we empirically test the importance of digitalization in deepening GVC participation. After correcting for potential biases arising from self-selection and reverse causality, our empirical analysis shows that digitalization by firms positively influences GVC deepening. Our results are quite robust to various measures of GVCs and digitalization. Further, we also document how digitalization boosts GVC integration of firms that are financially constrained.
UR - http://www.scopus.com/inward/record.url?scp=85127825412&partnerID=8YFLogxK
U2 - 10.1016/j.infoecopol.2022.100972
DO - 10.1016/j.infoecopol.2022.100972
M3 - Article
SN - 0167-6245
VL - 59
JO - INFORMATION ECONOMICS AND POLICY
JF - INFORMATION ECONOMICS AND POLICY
M1 - 100972
ER -