How does digital technology affect manufacturing upgrading? Theory and evidence from China
Qingwei Fu1,2
1School of International Economics and Trade, Shandong University of Finance and Economics, Jinan, China.
Plos One
|May 13, 2022
Summary
Digital technology significantly enhances manufacturing upgrading in China. Both domestic and foreign digital technologies boost industry advancement, with foreign tech showing higher efficiency for improved global value chain positioning.
Area of Science:
- Manufacturing
- Digital Technology
- Global Value Chains
Background:
- Digital technology is a key driver for manufacturing sector advancement.
- Integrating digital technology within global value chains is crucial for industrial upgrading.
Purpose of the Study:
- To analyze the impact of digital technology on manufacturing upgrading.
- To measure the development level of digital technology in manufacturing.
- To examine the role of digital technology across different manufacturing sectors.
Main Methods:
- Utilized World Input-Output Database for digital technology development level measurement.
- Employed theoretical analysis to identify innovation, resource allocation, and penetration effects.
- Conducted empirical tests on China's manufacturing industry data from 2001-2014.
Main Results:
- China's manufacturing digital technology index rose from 0.286 to 0.359 (2001-2014).
- Digital technology significantly positively impacts manufacturing upgrading (coefficient 0.129).
- Foreign digital technology is more efficient (coefficient 0.703) than domestic (0.124) but both are beneficial.
Conclusions:
- Digital technology integration is vital for China's manufacturing upgrading.
- The impact of digital technology varies across capital-intensive, technology-intensive, and different technology-level manufacturing industries.
- Accelerating digital technology adoption is essential for China to ascend the global value chain.
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