Effect of Technological Innovation Inputs on Global Value Chains Status

Abstract

Under the backdrop of the continuous escalation of the Sino—U.S. trade friction, China's industrial development environment in global value chains (GVCs) has further deteriorated, research on the improvement GVC status of the Chinese manufacturing industry has become the focus of attention for industry and academia. The direction of R&D inputs are of utmost importance to the improvement of GVC status. However, comparatively little attention has been paid to this topic in existing studies. Following the production activity decomposition framework and combining with the World Input-Output Tables, the action mechanism of R&D inputs on GVC status from two aspects of industrial value-added and embedding position were analyzed, the moderating effect of digital servitization was demonstrated. Results show that: The input of applied research has inverted U-shaped influence on the industrial value-added, while it has U-shaped influence on embedding position; The input of basic research has U-shaped influence on the industrial value-added, while it has inverted U-shaped influence on embedding position; The moderating effect of digital servitization between R&D inputs and GVC status is significant, in the short term, the digital servitization can not only magnify the promotion effect of the applied research inputs on GVC status, but also shorten the lag period of basic research inputs on GVC status. In the long run, the digital servitization can not only weaken the marginalization trend of the applied research inputs on GVC status, but also enhance the positive feedback effect of basic research inputs on GVC status. This study is important for China to improve the GVC status.