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Digitalization and global value chain participation: firm-level evidence from Indian manufacturing

Author

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  • Ketan Reddy

    (Indian Institute of Management Raipur)

  • Subash Sasidharan

    (Indian Institute of Technology Madras)

Abstract

We analyze the role of digital infrastructure in shaping the global value chain (GVC) participation of Indian manufacturing firms. To examine the digitalization and GVC nexus, a rich, firm-level, unbalanced panel of 4875 manufacturing firms from the past two decades is used to detail the rising significance of digital infrastructure in the Indian context and then to examine empirically the relationship between digitalization and GVCs. Employing a logit model, we observe a positive and significant association of digitalization on firms’ GVC participation. Further, subsample results highlight that digitalization promotes the integration of small firms and firms from low-technology industries into the GVC. Moreover, the findings of our analysis are robust to alternate measures of GVCs.

Suggested Citation

  • Ketan Reddy & Subash Sasidharan, 2023. "Digitalization and global value chain participation: firm-level evidence from Indian manufacturing," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 551-574, September.
    • Handle: RePEc:spr:epolin:v:50:y:2023:i:3:d:10.1007_s40812-023-00270-4
    DOI: 10.1007/s40812-023-00270-4
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    Cited by:

    1. Reddy, Ketan & Sasidharan, Subash, 2024. "Global value chains, productivity and markup: Evidence from India," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 250-271.

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    More about this item

    Keywords

    Digitalization; Indian manufacturing; Global value chains;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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