Can digital technology affect global value chain position?—cross-country evidence

Digital technology advancement has changed the operating mode of traditional industries, driving the digital transformation and global dispersion of production, distribution and consumption processes. This trend has also affected the structure of global value chains (GVCs) and altered the competitive landscape. However, the relationship between digital technology and GVC positioning remains unclear. This paper employs a panel two-way fixed effect model to examine the relationship between digital technology and GVC position across about 70 economies from 2008 to 2020, also with forward and backward linkages. Besides, we test the heterogeneity of this relationship with respect to regulation quality and industrial value added. And further investigate the underlying mechanism. Our findings show that digital technology is a driver of GVC position upgrading. Robustness test confirms the reliability of these results. Economics with more advanced digital technology are more likely to experience upward mobility within GVCs. The heterogeneity analysis also reveals that regulation quality will hinder the positive impact of digital technology on GVCs, whereas industrial value added will accelerate this positive impact. Furthermore, the relationship can be realized through two paths. That is, digital technology can enhance the position of GVCs by promoting innovation and upgrading industrial structures.