The Impact of Global Value Chain Embedding on Corporate Risk Taking of China’s A-Share Market-Listed Companies from 2000–2016

Abstract

Moving towards the high end of the global value chain (GVC) is an inevitable trend of the development of Chinese enterprises, and the level of enterprises’ risk-taking behavior is directly related to their profit acquisition in the global value chain. Based on the matching data of CSMAR and the “General Administration of Customs of the People’s Republic of China”, this paper explores how the embedding of the global value chain affects the risk-taking behavior of enterprises. It is found that (1) R&D investment is an important factor for listed companies to enhance their risk taking by embedding in the global value chain; however, financial constraints will negatively affect this factor. (2) The study’s findings also indicated that improving innovation capacity and increasing R&D investment is crucial for enterprises in developing countries to raise their corporate value. Moreover, it is helpful for enterprises to escape the jaws of danger in the GVC wave. It is advised that the government develop a financial market or enhance the external environment to encourage enterprises’ development. This study reveals the specific impact of global value chain embedding on corporate risk-taking behavior, provides new empirical evidence for understanding the micro mechanism of the relationship between global value chain embedding and economic growth, and has great practical significance for promoting Chinese enterprises to the high-end of the global value chain.