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The Impact of Government R&D Subsidies on Participation in GVCs

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  • Mikhail Vyacheslavovich SHATUNOV

    (St. Petersburg State University, St. Petersburg, Russia)

Abstract

The global economy today is characterized by globalization and rapid technological development, with 80% of world trade occurring through global value chains (GVCs). Participation in GVCs requires firms to innovate, which becomes a key element of their competitiveness. The development and implementation of innovations can take place either within the framework of cooperation between companies, universities and research centers, or by firms on their own, provided there is sufficient government subsidy for R&D. Such subsidies facilitate integration into GVCs and might lead to repositioning to more profitable chain links. The article highlights the significant impact of government R&D subsidies on participation in global value chains due to easing corporate financing constraints. To improve their position in GVCs, firms should modernize production and carry out research, and government subsidies could significantly expand private investment in R&D.

Suggested Citation

  • Mikhail Vyacheslavovich SHATUNOV, 2024. "The Impact of Government R&D Subsidies on Participation in GVCs," Russian Foreign Economic Journal, Russian Foreign Trade Academy Ministry of economic development of the Russian Federation, issue 9, pages 90-97, September.
    • Handle: RePEc:alq:rufejo:rfej_2024_09_90-97
    DOI: 10.24412/2072-8042-2024-9-90-97
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    References listed on IDEAS

    as
    1. Jaerim Choi, 2020. "The global value chain under imperfect capital markets," The World Economy, Wiley Blackwell, vol. 43(2), pages 484-505, February.
    2. Hyelin Choi & Semin Kim & Taehwan Jung, 2019. "The Role of Innovation in Upgrading in Global Value Chains," Global Economic Review, Taylor & Francis Journals, vol. 48(3), pages 273-283, July.
    3. Pavida Pananond, 2016. "From servant to master: Power repositioning of emerging-market companies in global value chains," Asian Business & Management, Palgrave Macmillan, vol. 15(4), pages 292-316, September.
    4. Jan Hagemejer, 2018. "Trade and Growth in the New Member States: The Role of Global Value Chains," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(11), pages 2630-2649, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    global value chains; GVCs; R&D; R&D subsidies; GVCs forward links; GVCs backward links; world trade; value added trade;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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