Reexamining the Impact of Global Value Chain Participation on Regional Economic Growth: New Evidence Based on a Nonlinear Model and Spatial Spillover Effects with Panel Data from Chinese Cities

Can Li, Qi He (), Han Ji (), Shengguo Yu and Jiao Wang
Additional contact information
Can Li: School of Business Administration, Northeastern University, Shenyang 110167, China
Qi He: Research Institute for Global Value Chains, University of International Business and Economics, Beijing 100029, China
Han Ji: Agricultural Information Institute, Chinese Academy of Agricultural Sciences, Beijing 100081, China
Shengguo Yu: International Business School, Hainan University, Haikou 570228, China
Jiao Wang: School of Marxism, Hainan Normal University, Haikou 571158, China

Sustainability, 2023, vol. 15, issue 18, 1-31

Abstract: This study utilizes panel data drawn from 239 Chinese cities, and it employs fixed-effects models, mediation models, and spatial spillover models to reexamine the actual impact of the global value chain’s (GVC) participation on regional economic growth. The findings reveal that this impact exhibits a U-shaped nonlinear pattern, with the turning point of GVC occurring at 0.45, which is higher than that of 222 cities. Most cities are on the left side of the U-shaped curve, which corresponds with the second stage of the “in-out-in-again” GVC participation pattern (i.e., the “out” stage). During this stage, a decline in foreign value-added ratio (FVAR), with regard to exports (accompanied by an increase in the domestic value-added ratio), promotes economic growth. Innovation capability acts as a mediator in the relationship between GVC participation and economic growth. Furthermore, GVC participation has significant spillover effects on neighboring cities, with siphon and spillover effects coexisting. Thus, China should focus on establishing domestic value chains and innovation systems, achieving relative independence from existing GVCs dominated by developed countries, enhancing indigenous innovation capabilities, and laying the foundation for the third stage (in-again) of reintegration into GVCs, at the high value-added end, to achieve a higher level of openness. This study explores the nonlinear impact of GVC participation on regional economic growth in China from both theoretical and empirical perspectives, focusing on the finest divisions that remain feasible—cities. This approach expands and supplements the relevant field of research in valuable ways, yielding more realistic research conclusions and policy recommendations.

Keywords: GVC participation; economic growth; nonlinear analysis; innovation capability; spatial spillover (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/18/13835/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/18/13835/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:18:p:13835-:d:1241684

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().