Industrial policy, digital transformation and firms’ GVC position: Dual mechanism of industry structural upgrading and firm bargaining power enhancement

Xinyi Gao, Siyuan Dong, Yiling Zhang () and Jun Huang
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Xinyi Gao: Wuhan University
Siyuan Dong: the University of Melbourne
Yiling Zhang: Shanghai University of Finance and Economics Zhejiang College
Jun Huang: Shanghai University of Finance and Economics

Journal of Economics and Finance, 2025, vol. 49, issue 3, No 5, 768-794

Abstract: Abstract This study integrates the macro-level perspective of industry structure with the micro-level focus on firm bargaining power to innovatively construct firms’ GVC position indicator. Using panel data from Chinese listed firms between 2010 and 2023, this study constructs two panel datasets at the industry-level and firm-level to examine the dual mechanisms through which industrial policy promotes firms’ global value chain position. The empirical results show that industrial policy enhances firms’ GVC position through industry structural upgrading and firm bargaining power enhancement. Further analysis using a moderated mediation model reveals that digital transformation plays a positive moderating role in the upgrading effect of industrial policy on firms’ GVC position. Heterogeneity tests suggest that the positive impact of industrial policy is more pronounced in regions stronger industrial foundations and higher economic growth. This study offers both theoretical insights and practical implications for firms seeking to better integrate into the global economy.

Keywords: Industrial Policy; Digital Transformation; Global Value Chain Position; Industry Upgrading; Bargaining Power (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12197-025-09724-y

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