Does Process Digitalization Promote Firms’ Participation in Global Value Chain?Micro-Evidence from Chinese Manufacturing Enterprises

It is of great theoretical and practical significance to explore the impact of process digitalization on firms’ participation in global value chain (GVC) in the context of building a new development pattern of “double circulation” and building a “digital China”. Based on a large-sample survey data of manufacturing enterprises in China, this paper empirically explores the impact of process digitalization on firms’ participation in GVC, and examines the moderating effect of internal information sharing and political stability on the relationship between the two. The research found that process digitalization helps manufacturing enterprises to embed into the GVC. After using the propensity score matching (PSM) to solve the problem of sample self-selection bias and the variable replacement method for robustness check, the conclusion remains consistent. The result of moderating effect shows that political stability positively moderates the relationship between process digitalization and firms’ participation in GVC, that is, the stronger the political stability, the stronger the role of process digitalization in promoting firms’ participation in GVC. However, internal information sharing has no significant moderating effect on the relationship between process digitalization and firms’ participation in GVC. Heterogeneity analysis shows that process digitalization is more conducive to enterprises with no financing constraints and high absorptive capacity to embed into GVC, compared with enterprises with financing constraints and low absorptive capacity.