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Digital economy development and global value chain network centralization.

Hankun Yuan1, Mingyang Yue2, Rong Wang3

  • 1Department of World Economy and Politics, Party School of C.P.C Jiangsu Provincial Committee, Nanjing, Jiangsu, China.

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|July 17, 2025
PubMed
Summary
This summary is machine-generated.

The digital economy boosts a nation's role in global value chains (GVCs) by improving productivity and resource allocation. This effect is stronger in developed nations and high-quality industries, leading to longer GVCs and upward mobility.

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Area of Science:

  • Economics
  • International Trade
  • Digital Economy

Background:

  • The digital economy's growth is linked to economic liberalization and advanced manufacturing integration into global value chains (GVCs).
  • Understanding the impact of digital economy development on a nation's position within GVCs is crucial for economic strategy.

Purpose of the Study:

  • To empirically examine the effects of digital economy development on the centralization and internal mechanisms of the GVC network.
  • To investigate how digital economy development influences a country's position and length within GVCs.

Main Methods:

  • Utilizing a heterogeneous firm model to incorporate digital economy factors.
  • Aggregating firm production behavior at the national level for empirical analysis.
  • Analyzing the impact on GVC network centralization and internal mechanisms.

Main Results:

  • Digital economy development significantly enhances a country's centralization within the GVC network.
  • The primary mechanisms driving this enhancement are increased productivity and alleviated resource misallocation.
  • Developed countries and industries with high institutional quality experience a greater positive impact.

Conclusions:

  • Digital economy development strengthens a nation's centrality in global value chains.
  • It also extends the length of a country's GVC participation and facilitates upward mobility within these chains.
  • Policy interventions promoting the digital economy can enhance national competitiveness in global manufacturing networks.