This paper is based on China's “ dual circulation” development paradigm and goal of high-quality innovation-driven development. It explores how the way the global value chain ( GVC ) is integrated alfects diferent types oftechnological innovation by firms, including, domestic and overseas technological innovation, and the mechanism for thatelfect. The results indicate that firms integrating GVC from upstream promote domestic technological innovation, especially forforeign-owned and general trade firms and those in highly competiive industries. However, the upstream GVC integrationdoes not have a significant promoting elleet on overseas technological innovation. 'The downstream integration of GVC has aninhibiting ellect on domestic and overseas technological innovation, especially for domestic and general trade firms and thosein less competitive industries. The mechanism analysis shows that improving their absorptive capacity helps upstream GVC integration generate greater domestic technological innovation and reduces the inhibition elfect of downstream GVC integrationon innovation by all types of fimms. Fuuther analysis reveals that the facilitating effect of upstream GVC integration and theinhibiting elfect of downstream GVC integration on green technological innovation exist only in non-polluting industries. Thispaper has important policy implications for China in the process of integrating GVCs, enhancing firms'technological innovationcapacity, and realizing industrial upgrading.

Key words: global value chain (GVC); domestic technological innovation; overseas technological innovation; absorptive capacity; green technological innovation