Impact of industrial robot applications on global value chain participation of China manufacturing industry: Mediation effect based on product upgrading

Abstract

Promoting the application of industrial robot (IR) is an important module for China to build core competitiveness, and it is also the main grasp of global value chain participation (GVCP). Using China manufacturing industry panel data from 2006–2014, working from the perspective of product upgrading, this paper empirically analyzes the impact of IR applications on GVCP. The empirical results show that IR applications weaken China’ incentives to participate in global value chains (GVCs); this weakening effect is reflected in both forward and backward participation in GVCs. On the one hand, the mediation effect test results indicate that the product upgrading effect brought about by IR applications can help China achieves the import substitution of intermediate inputs and uses local intermediate inputs to produce exports. These steps would reduce the backward participation in GVCs. On the other hand, the localization of manufacturing can result in China losing the opportunity to export intermediate inputs to other economies, thus reducing the forward participation of GVCs. Of course, due to sample limitations, the research conclusions of this article are only applicable to interpreting the Chinese economy.