On GVC and innovation: the moderating role of policy

Yasmine Eissa () and Chahir Zaki
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Yasmine Eissa: Cairo University

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2023, vol. 50, issue 1, No 5, 49-71

Abstract: Abstract This paper empirically investigates the association between global value chains (GVC) participation and countries’ innovation performance. Highlighting the learning effect of foreign knowledge embedded in imported intermediate goods counters the argument that GVC participation is biased towards developed countries with skilled labor abundance. We construct a GVC knowledge spillovers index by merging data on GVC from the EORA26 dataset with R&D of the trade partner. Results show positive association between the GVC knowledge spillovers index and innovation measured by resident patent per capita. Likewise, we show that trade policy, intellectual property rights’ agreements, and competition policy constitute moderating factors in the nexus between GVC participation and innovation. Our results remain robust when we use alternative measures for our two variables of interest and when we control for foreign knowledge spillovers in imported final goods.

Keywords: Global value chains; Innovation; R&D; Technological change (search for similar items in EconPapers)
JEL-codes: F14 O31 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40812-022-00255-9

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