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Digital finance and the firms’ production stages along the global value chain

Author

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  • Liu, Qiming
  • Li, Chenda
  • Zhang, Liang
  • Cao, Liang
  • Lai, Liubing

Abstract

The rapid rise of digital finance has become essential for firms seeking to ascend the global value chain (GVC). This paper investigates whether and how the development of city-level digital finance influences firms' span of production stages along the GVC. The results show that digital finance significantly expands firms' production stages, and the finding remains robust to multiple tests. Further mechanism analysis disclosures that digital finance realizes its positive impact by increasing firms' import upstreamness, alleviating external financial constraints, and enhancing innovation activities, which ultimately enable firms to occupy more stages in global production. Heterogeneity tests indicate that the effects vary systematically across firms of different sizes and ownership types.

Suggested Citation

  • Liu, Qiming & Li, Chenda & Zhang, Liang & Cao, Liang & Lai, Liubing, 2026. "Digital finance and the firms’ production stages along the global value chain," International Review of Economics & Finance, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:reveco:v:106:y:2026:i:c:s1059056026000596
    DOI: 10.1016/j.iref.2026.104946
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