Intangible assets, global value chains, and innovation: evidence from Vietnamese SMEs

Abstract

Abstract This paper studies the impact of participation in global value chains (GVCs) on innovation in Vietnamese small and medium enterprises (SMEs). We find that the Vietnamese SMEs that participate in GVCs are more likely to introduce product innovation. We also show that the likelihood of introducing product innovation for firms that participate in GVCs increases when they invest in intangible assets. These findings qualify the learning-by-participating model in GVCs by showing that the gains from GVC participation depend on a firm’s internal absorptive capacities.