The Journal of World Economy, 2020, Issue 12

Authors: Lyu Yue; Wei Yaning

Abstract: This paper measures trade network indices at the corporate level and examines howthe-firm's trade network affects the domestic value added of exports from the perspective ofspecialization in global value chains. The study's findings indicate that: ( i) firm's Page R ankcentrality has shown an overall upward trend, the PageRank centrality of FDI enterprises hasincreased relatively fast, and that of the labour-intensive enterprises in the eastern regions isrelatively high; (ii) based on empirical research, trade network has significantly promoted itsdomestic value added ratio in exports, (iii) according to the mechanism analysis, the firm's tradenetwork promotes its DVAR in exports through three channels affecting industry concentration.intermediate inputs and the degree of foreign capital inflow, and ( iv) drawing on theheterogeneity analysis, there is a more positive effect of the trade network on thesenon-state-owned, eastern and labour-intensive enterprises. Ultimately, a coherent conclusion isdrawn using the difference-in-differences technique, which introduces the exogenous shock ofChina's accession to the WTO.

Key words: firm's trade network, DVAR, PageRank centrality, global value chain