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The Role of Digitalisation in Shaping India’s Global Value Chain Participation

Author

Listed:
  • Subash Sasidharan
  • Ketan Reddy

    (Indian Institute of Technology Madras, Chennai, India)

Abstract

This study investigates the role of digital infrastructure in shaping the global value chain (GVC) participation of Indian manufacturing firms. To examine the digitalisation and GVC nexus, a rich, firm-level, unbalanced panel of 4,875 manufacturing firms from the past 2 decades is employed to detail the rising importance of digital infrastructure in the Indian context and then to examine empirically the relationship between digitalisation and GVCs. Employing a logit model, a positive, significant impact of digitalisation is found regarding firms’ GVC participation. Further, subsample results highlight that digitalisation promotes integration of small firms and firms from low-technology industries into the GVC. The findings of the analysis are robust to alternate measures of the GVCs.

Suggested Citation

  • Subash Sasidharan & Ketan Reddy, 2021. "The Role of Digitalisation in Shaping India’s Global Value Chain Participation," Working Papers DP-2021-09, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2021-09
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    More about this item

    Keywords

    digitalisation; Indian manufaturing; global value chain margins; difference-in-difference;
    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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