Digital technologies and global value chains: evidence from the Italian industry

This paper studies the relationship between firm participation in Global Value Chains (GVCs) and pro- pensity to adopt digital technologies (DT). By leveraging data from a sample of about 25,000 Italian industrial firms for the years 2017–2019, we investigate whether participation in GVCs encourages firms to adopt DT; to what extent GVC relational governance is relevant to that choice; if the association between GVCs and DT is heterogeneous across firm size. The results show that: i) GVC participation is positively and significantly associated with the adoption of DT; ii) relational forms of GVC govern- ance are positively related to operational DT; iii) in terms of propensity to use DT, the gain derived from being in a GVC is systematically greater for smaller firms. To the extent that GVCs foster the adoption of DT among small firms, they promote economic growth by spreading the effects of advanced DT to the whole economy.