Improving financial productivity and upgrading in global value chains

Qun Zhang, Bin Qiu and Shaoqin Sun

Finance Research Letters, 2024, vol. 67, issue PA

Abstract: This study integrates the financial productivity improvement in a multi–country, multi–sector Ricardian model to examine its impact on China's position within global value chains (GVC). We also differentiate between the trade elasticities of the financial sector concerning intermediate inputs and final consumption. Through counterfactual analysis, our research reveals a consistent upward trajectory in China's GVC positioning at aggregate and sectoral levels that is attributable to financial productivity improvement. This ascent is facilitated by input–output links and cost-saving effects. The findings validate the significance of financial productivity improvement in advancing China's GVC positioning.

Keywords: Financial productivity improvement; Global value chains; Input–output links; Cost–saving effects; Structural model (search for similar items in EconPapers)
JEL-codes: F10 F14 G20 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pa:s154461232400792x

DOI: 10.1016/j.frl.2024.105762

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