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The Siphon Effect of Consumption End on Production End in the Value Chain under the Data Factor Flow: Evidence from the Regional Comprehensive Economic Partnership Region

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  • Junli Shi

    (School of International Trade and Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Tingdong Wang

    (School of International Trade and Economics, Shandong University of Finance and Economics, Jinan 250014, China)

Abstract

The data factor strengthens the power of the consumption end, and its high liquidity alters the relationship between the consumption end of the value chain (CEVC) and the production end of the value chain (PEVC). In this paper, we used an interaction term model to empirically analyze the role of the data factor flow in the impact of the CEVC on the PEVC at the Regional Comprehensive Economic Partnership (RCEP) functional integration stage. The results indicate that the data factor flow facilitates the effect of CEVC on PEVC, which brings about the siphon effect (SE). We conducted heterogeneity tests at the national and industrial levels, which revealed the following: (1) The SEs of data capital flow in larger economies and data researcher flow in smaller economies are significant. (2) In most instances, technology-intensive industries suppress the SE because they control the flow of core technologies. (3) Due to the integration and penetration of the data factor with conventional factors, the SE is most prevalent in capital-intensive industries. (4) In labor-intensive industries, the SE is not evident and is even suppressed due to capital substitution for labor. This study provides policy recommendations that would help to reduce the RCEP region’s reliance on external demand and foster regional sustainable development.

Suggested Citation

  • Junli Shi & Tingdong Wang, 2022. "The Siphon Effect of Consumption End on Production End in the Value Chain under the Data Factor Flow: Evidence from the Regional Comprehensive Economic Partnership Region," Sustainability, MDPI, vol. 14(21), pages 1-22, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:13726-:d:951004
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