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Global value chains, innovation and performance: firm-level evidence from the Great Recession

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  • Emanuele Brancati
  • Raffaele Brancati
  • Andrea Maresca

Abstract

This article takes advantage of a newly available survey on the Italian industry to analyze the behavior of global value chains (GVCs) in the aftermath of the Great Recession. We design a comprehensive taxonomy of GVC participation modes and explore their impact on firms’ innovativeness and performance. Our findings highlight relevant heterogeneities in how GVC participants fared the crisis. While high-skill relational suppliers display a significant propensity to engage in innovative activities and R&D projects, other modes of GVC participation have no premium compared to domestic companies. This heterogeneity is also reflected in differential productivity and sales growth. Compared to the precrisis trends, we document a severe demand shock for low-skill and subordinated firms, while relational GVCs appear to be somewhat sheltered from the effects of the crisis.

Suggested Citation

  • Emanuele Brancati & Raffaele Brancati & Andrea Maresca, 2017. "Global value chains, innovation and performance: firm-level evidence from the Great Recession," Journal of Economic Geography, Oxford University Press, vol. 17(5), pages 1039-1073.
    • Handle: RePEc:oup:jecgeo:v:17:y:2017:i:5:p:1039-1073.
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    More about this item

    Keywords

    Global value chains; innovation; R&D; performance; Great Recession;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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