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

It is of great theoretical and practical significance to explore the impact of process digitalization on firms’ participation in global value chains (GVC) in the context of building a new development pattern of “dual circulation” and a “digital China”. Based on the survey data from a large sample of manufacturing firms 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 them. The study finds that process digitalization is helpful to manufacturing firms’ participation in GVC, and the finding remains the same after using the propensity score matching to solve the problem of sample self-selection bias and using the variable replacement method to test robustness. The results of moderating effect indicate 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 promoting effect of process digitalization on firms’ participation in GVC, but 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 the participation of the firms with no financing constraints and high absorptive capacity in GVC than to the participation of the firms with financing constraints and low absorptive capacity.