Global value chains and technology transfer: new evidence from developing countries

Abstract

International trade has long been considered a channel of technology transfer. This paper draws from the World Bank’s Enterprise Surveys to provide a sample of 18 developing and emerging economies to investigate whether global value chains (GVCs) are a vehicle for the transfer of technology. It focuses on one specific channel for technology transfer, namely, the licensing of foreign technology. To control for the possible endogeneity of technology licensing, propensity score matching is combined with a difference-in-differences approach. The results show a positive effect of being involved in two-way trading on the licensing of foreign technology. Firms that become two-way traders are significantly more likely to use foreign-licensed technology than firms starting to export or import. This evidence suggests that the complexity associated with the mode of internationalisation determines the licensing of foreign technology. GVC participation also appears to foster firms’ performance, reflecting my findings that the acquisition of foreign technology leads to significant productivity improvements.

Designing benefit distribution driven innovation strategy for local enterprises under the global value chain system

“…On the contrary, independent R&D activities of leading local enterprises will be fully suppressed by multinational enterprises and lose more profit distribution in the short term. This finding is quite different from the previous that foreign technology spillovers in the global value chain system can help local enterprises increase their productivity (Rigo, 2020). Second, we found that the R&D activities of small and medium‐sized local enterprises can help reduce the degree of suppression of leading local enterprises by multinational enterprises.…”

“…Kimseng et al (2020) argued that the knowledge exchange in the global value chain system can help enterprises to carry out innovative activities. Rigo (2020) believed that foreign technology spillovers in the global value chain system can help local enterprises to increase their productivity. Hao et al (2021) explored the impact of international technology spillovers on the carbon emissions of local Chinese companies and found that the impact of technology spillover on carbon emissions is different in central and western China.…”

Impact of global value chains on total factor productivity: The case of Indian manufacturing

“…Following Baldwin and Yan (2014), Del Prete et al (2017), and Rigo (2021, GVC firms are identified using a binary variable that takes the value 1 if the firm is simultaneously importing intermediates (raw materials, stores and spares, and capital goods and services) and exporting at a given point of time. 3 Non-GVC firms are either those that conduct one-way trade (import or export) or those that are not internationalized, that is, they conduct little or no international trade and serve only the domestic market.…”

Foresight for income and employment: What can we learn for agricultural research for development

“…The participation in Global Value Chain (GVC) can significantly contribute to productivity improvement, economic growth, job creation and poverty reduction (Rigo 2021;World Bank 2020). An increase of participation in GVC could also reduce the competitiveness gap between small and large firms (Boffa et al 2021).…”

“…The work can be distinguished from other efforts related to food and agriculture (e.g. ISDC's 2018 volume edited by Serraj and Pingali, FAO's annual State of Food and Agriculture report (FAO 2020;2021;, IFAD's periodic Rural Development Report (IFAD 2016;2021), OECD-FAO's annual Agricultural Outlook report (OECD and FAO 2020;2021), the World Bank's World Development Report (World Bank 2008;2010;2021), and others) in terms of time horizon, geographic or thematic focus. The work adds to other foresight analyses, e.g.…”