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Global Value Chains, Digital Economy, and Upgrading of China’s Manufacturing Industry

Author

Listed:
  • Wenqi Li

    (College of Humanities, Arts and Social Sciences, Nanyang Technological University, Singapore 639798, Singapore)

  • Qi Li

    (School of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China
    These authors contributed equally to this work.)

  • Ming Chen

    (School of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China
    These authors contributed equally to this work.)

  • Yutong Su

    (School of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China
    These authors contributed equally to this work.)

  • Jianhua Zhu

    (School of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China)

Abstract

This study utilized panel data from 31 provinces in China from 2006 to 2020 to investigate the impact of the digital economy on the upgrading of the manufacturing industry’s global value chain. Two types of spatial weighting matrices were used to construct SAR, SEM, SAC, and SDM models. The results revealed that technological innovation plays a direct mediating role in the upgrading of the manufacturing industry, and the global value chain has a positive regulatory effect on the relationship between the digital economy and the manufacturing industry’s upgrading. Under the economic distance spatial weighting matrix, the spatial spillover effect of the digital economy on the manufacturing industry’s global value chain is not significant, whereas, under the geographic distance spatial weighting matrix, the digital economy has a positive and significant spatial spillover effect. The SDM model showed the best explanatory effect. This implies that geographic spatial dependence has a significant impact on the upgrading of the manufacturing industry’s industrial structure, and it is positively influenced by nearby provinces. Understanding the impact mechanism and spatial spillover effects of the digital economy on the manufacturing industry’s upgrading can help promote efficient, fair, and balanced regional development. It can also aid in constructing a new domestic and international “dual circulation” development pattern that evolves with the global manufacturing value chain, sharing the dividends of the digital economy’s impact on the global value chain’s development.

Suggested Citation

  • Wenqi Li & Qi Li & Ming Chen & Yutong Su & Jianhua Zhu, 2023. "Global Value Chains, Digital Economy, and Upgrading of China’s Manufacturing Industry," Sustainability, MDPI, vol. 15(10), pages 1-25, May.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:10:p:8003-:d:1146800
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