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Industrial policy, digital transformation and firms’ GVC position: Dual mechanism of industry structural upgrading and firm bargaining power enhancement

Author

Listed:
  • Xinyi Gao

    (Wuhan University)

  • Siyuan Dong

    (the University of Melbourne)

  • Yiling Zhang

    (Shanghai University of Finance and Economics Zhejiang College)

  • Jun Huang

    (Shanghai University of Finance and Economics)

Abstract

This study integrates the macro-level perspective of industry structure with the micro-level focus on firm bargaining power to innovatively construct firms’ GVC position indicator. Using panel data from Chinese listed firms between 2010 and 2023, this study constructs two panel datasets at the industry-level and firm-level to examine the dual mechanisms through which industrial policy promotes firms’ global value chain position. The empirical results show that industrial policy enhances firms’ GVC position through industry structural upgrading and firm bargaining power enhancement. Further analysis using a moderated mediation model reveals that digital transformation plays a positive moderating role in the upgrading effect of industrial policy on firms’ GVC position. Heterogeneity tests suggest that the positive impact of industrial policy is more pronounced in regions stronger industrial foundations and higher economic growth. This study offers both theoretical insights and practical implications for firms seeking to better integrate into the global economy.

Suggested Citation

  • Xinyi Gao & Siyuan Dong & Yiling Zhang & Jun Huang, 2025. "Industrial policy, digital transformation and firms’ GVC position: Dual mechanism of industry structural upgrading and firm bargaining power enhancement," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 49(3), pages 768-794, September.
    • Handle: RePEc:spr:jecfin:v:49:y:2025:i:3:d:10.1007_s12197-025-09724-y
    DOI: 10.1007/s12197-025-09724-y
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