Abstract
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.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
