Manufacturing Digitalization and Global Value Chain Resilience: From the Perspective of “Stabilizing, Strengthening, and Extending the Chain”

【Authors】

SHENG Bin, HAO Xiazhen

【WorkUnit】

Nankai University, 300071

【Abstract】

The deep integration of digital technologies with the real economy has significantly propelled the continuous penetration and evolution of Global Value Chains （GVCs）, reshaping the international industrial division of labor. This integration has emerged as a critical driver of GVC resilience, defined herein as the stability, security, and sustainability of a firm’s participation in global value chain. From the perspective of stabilizing, strengthening, and extending industrial chain, this study empirically examines the impact of manufacturing digitalization on firms’ GVC resilience and elucidates the underlying mechanisms, with a focus on the convergence of digital and physical sectors. 
This study makes three key contributions to the literature on GVC resilience. First, regarding indicator measurement, this study provides accurate measures for both manufacturing digitalization and GVC resilience. Incorporating trade modes and industry heterogeneity into the value-added trade accounting framework, it provides a comprehensive assessment of manufacturing digitalization indicators. From the perspective of “stabilizing, strengthening, and extending industrial chain”, it further constructs GVC resilience metrics based on Chinese firm-level data, thereby enriching the existing research on the definition and measurement of GVC resilience. Second, in terms of theoretical mechanisms, this paper systematically constructs a theoretical framework detailing how manufacturing digitalization influences GVC resilience. It provides an in-depth analysis of how digital technologies enhance firms’ ability to respond to external shocks by improving system efficiency across upstream and downstream segments of industrial chain. Finally, from the research perspective, this study, adopting both static and dynamic viewpoints, thoroughly examines how manufacturing digitalization enhances GVC resilience at the firm level, and constructs a comprehensive theoretical framework, achieving a more integrated analysis of GVC resilience.
This study finds that manufacturing digitalization significantly enhances firms’ resilience within GVC, as evidenced by improvements in stability, security, and sustainability. These enhancements are driven by several mechanisms: innovation-driven effects, cost-saving effects, improved trade environment, and export diversification. Additionally, digitalization exerts a “ripple effect” across the industrial chain, bolstering the efficiency of upstream and downstream sectors and collectively strengthening the entire value chain’s resilience. However, the impact of digitalization on GVC resilience is not uniform; it varies by technological complexity, trade modality, and the stage of a firm’s lifecycle, underscoring the need for tailored digital strategies to effectively fortify firms against global supply chain disruptions.
This paper puts forward the following policy suggestions. First, accelerate manufacturing digitalization. Governments should proactively support manufacturing firms in their full-scale digital transformation, enhancing digital and informational technologies throughout the production and operational processes. Second, strengthen technological innovation to build an independent and controllable industrial chain. Enterprises must prioritize research and innovation capabilities, placing technological advancement at the core of their development strategies. Governments should intensify policy support through measures such as R&D subsidies and financial assistance for technological innovation projects. Third, build institutional environments and market infrastructure that support digital transformation. Governments should focus on building an institutional framework and market infrastructure conducive to the widespread adoption of digital technologies. Fourth, leverage digital technologies to reduce uncertainties, diversify exports, and optimize international trade structures. Governments should encourage enterprises to use digital technologies for identifying trade partners with lower uncertainty, thus improving the export market composition and reducing external risks associated with trade-partner instability.

JEL: F14, O47

【KeyWords】

Manufacturing Digitalization, Global Value Vhain Resilience, Industrial Chain Correlation, Survival Analysis