Technology transfer and global value chain upgrading of manufacturing firms: Evidence from China

Abstract

Breaking through the predicament of "low-end lock-in" and achieving the upgrading of enterprises within the global value chain (GVC) is a critical issue in the study of internationalization strategies for enterprises in emerging economies. This paper uses China, a quintessential representative of such economies, as a case to explore how technology transfer can facilitate the upgrading of enterprises' GVCs. This research aims to reshape the international strategic positioning of Chinese enterprises by promoting the integration and development of technology transfer and the GVC. Utilizing patent data from Chinese manufacturing enterprises, as well as data from Chinese industrial enterprises and customs records from 2004 to 2014, this study empirically examines the relationship between technology transfer and the upgrading of enterprises' GVCs. Additionally, the moderating effect of industrial agglomeration is incorporated into the research framework.The findings reveal that both technology transfer in and technology transfer out significantly positively influence the upgrading of enterprises' GVCs, highlighting the crucial role of technological knowledge flow in enhancing enterprise positioning within the GVC. Furthermore, industrial agglomeration is shown to exert a positive moderating effect on GVC upgrading as a result of technology transfer out. This study provides valuable insights for policymakers, enterprise managers, and academics, enabling a more nuanced understanding of the pivotal role of technology transfer in reshaping GVCs. Consequently, it offers robust support for the internationalization strategies of Chinese enterprises.