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Value Chain Digitalization, Global Value Chain Embeddedness, and Distributed Innovation in Value Chains

Author

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  • Lingling Qin

    (School of Economics, Guangdong University of Technology, 161 Yinglong Road, Guangzhou 510520, China
    Key Laboratory of Digital Economy and Data Governance, Guangdong University of Technology, Guangzhou 510520, China)

  • Weihong Xie

    (School of Economics, Guangdong University of Technology, 161 Yinglong Road, Guangzhou 510520, China)

  • Peiyi Jia

    (Jack H. Brown College of Business & Public Administration, California State University San Bernardino, 5500 University Parkway, San Bernardino, CA 92407, USA)

Abstract

How does a firm’s value chain digitalization contribute to its innovation in value chains? This study investigates innovation activities in value chains from a combination of distributed innovation perspective and technology affordance theory. We posit that a digital value chain (DVC) plays a pivotal role in driving distributed innovation in value chains. Our focus is specifically directed toward exploring the interconnected dynamics of the DVC, global value chain (GVC), and diversification strategy, elucidating the influence of their interactions on a firm’s distributed innovation in value chains. Leveraging the data of 862 manufacturing firms from the World Bank Enterprise Survey (WBES) in China, our empirical analysis reveals several key findings: (1) value chain digitalization positively influences distributed innovation in value chains and GVC embeddedness, (2) GVC embeddedness enhances distributed innovation in value chains, and (3) product diversification serves as a positive moderator, strengthening the effects of both value chain digitalization and GVC embeddedness on distributed innovation in value chains. In summary, this paper deepens our understanding of the relationships between DVC, GVC, diversification strategy, and distributed innovation in value chains. Our research provides theoretical and policy implications for digitalization and innovation strategies which are significant sources of sustainable development for firms and GVCs.

Suggested Citation

  • Lingling Qin & Weihong Xie & Peiyi Jia, 2024. "Value Chain Digitalization, Global Value Chain Embeddedness, and Distributed Innovation in Value Chains," Sustainability, MDPI, vol. 16(7), pages 1-24, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:7:p:2845-:d:1366112
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