MFJ Lunch Seminar: Global Value Chains and Domestic Innovation

This seminar will take place in the form of a videoconference. The participants will be contacted for the informations by email.

This paper explores how changes in both position and participation in Global Value
Chain networks affect firm innovation. The analysis combines matched patent-firm data
for Japan with measures of GVC network centrality and GVC participation utilizing the
OECD Inter-Country Input-Output Tables for the period 1995 to 2011. We find that Japan’s
position in the GVCs has shifted from being at the core of Asian value chains towards the
periphery relative to other countries in the network, i.e. becoming less “central”. We use
China’s WTO accession as an instrumental variable for changes in Japanese centrality. Our
analysis shows that increases in forward centrality – as a key supplier - tend to be positively
associated with increasing firm patent applications. Firms in key hubs within GVCs,
specifically as key suppliers, appear to benefit from knowledge spillovers from various
customers and downstream markets.

Study co-authored with Kenta IKEUCHI (Research Institute of Economy, Trade and Industry), Chiara CRISCUOLO (Organisation for Economic Co-operation and Development), Jonathan TIMMIS (IFC – World Bank Group), Antonin BERGEAUD (Banque de France).

About the speaker

Keiko Ito, Chuo University

Keiko Ito (Dr.) is a professor at the Faculty of Commerce, Chuo University, Japan. She received
her Ph.D. in Economics from Hitotsubashi University in 2002. She taught at Senshu
University (2004-2018), and was staff on loan at the OECD (2016-2017) and a visiting fellow
at Columbia University (2007-2008). Her research interests are on the empirical analysis on
international trade and foreign direct investment, and industry and firm-level productivity
analysis, mainly using firm- or plant-level data. She authored a number of academic articles
on these research areas.