The Role of Digitalisation in Shaping India’s Global Value Chain Participation

Subash Sasidharan and Ketan Reddy
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Ketan Reddy: Indian Institute of Technology Madras, Chennai, India

No DP-2021-09, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: This study investigates the role of digital infrastructure in shaping the global value chain (GVC) participation of Indian manufacturing firms. To examine the digitalisation and GVC nexus, a rich, firm-level, unbalanced panel of 4,875 manufacturing firms from the past 2 decades is employed to detail the rising importance of digital infrastructure in the Indian context and then to examine empirically the relationship between digitalisation and GVCs. Employing a logit model, a positive, significant impact of digitalisation is found regarding firms’ GVC participation. Further, subsample results highlight that digitalisation promotes integration of small firms and firms from low-technology industries into the GVC. The findings of the analysis are robust to alternate measures of the GVCs.

Keywords: digitalisation; Indian manufaturing; global value chain margins; difference-in-difference (search for similar items in EconPapers)
JEL-codes: F14 F15 L86 O14 (search for similar items in EconPapers)
Date: 2021-06-01
New Economics Papers: this item is included in nep-cwa, nep-int, nep-isf and nep-tid
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