From Input-Output Networks to Sectoral Innovation

Kossi Messanh Agbekponou ()
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Kossi Messanh Agbekponou: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper investigates how global value chain (GVC) centrality shapes sectoral innovation. We develop a multi-sector model where innovation incentives depend on network centrality, upstream frictions, and knowledge spillovers. GVC centrality enhances innovation incentives by reducing effective costs and amplifying spillovers---conditional on moderate frictions and sufficient absorptive capacity in the network. Using data on 17 manufacturing sectors across 47 countries over 1995--2013, we construct sector-level centrality measures from OECD input-output tables and link them to patent and R&D outcomes. We show that GVC centrality---especially backward---significantly boosts innovation. Effects are significant when linkages involve institutionally diverse or technologically complementary partners, not necessarily advanced ones. In contrast, forward centrality shows weaker and more context-dependent results. We also uncover non-linearities: innovation gains diminish at high levels of centrality, suggesting coordination limits or absorptive constraints. Results are robust across estimation methods and hold for both patent and R\&D measures. These findings highlight the importance of structural positioning---beyond trade volumes or openness---in shaping innovation, with implications for industrial policy and strategic integration in GVCs.

Keywords: Network Centrality; Global Value Chains; Innovation; Knowledge Diffusion (search for similar items in EconPapers)
Date: 2025-06-24
Note: View the original document on HAL open archive server: https://hal.science/hal-05128290v2
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-05128290

DOI: 10.13140/RG.2.2.22621.32486

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