R&D subsidies, internet penetration and global value chain position

Abstract

The purpose of this research is to examine the relationship between R&D subsidies and global value chain position (GVCP), as well as the moderating role of internet penetration. Panel regression model analysis of a dataset of Chinese regional GVCP from 2005 to 2016 shows an inverted U‐shaped relationship between R&D subsidies and GVCP. Furthermore, our empirical analysis suggests that internet penetration can weaken this inverted U‐shaped relationship. These results highlight the importance of internet penetration for regional enterprises and provide policy makers with new insights into their subsidy policies.