Global Value Chain, GVC,biased technological change and reginal total factor productivity differences

We discuss the link between global value chains (GVC) and the widening differences in total factor productivity (TFP) across regions. Firstly, the empirical evidence from China indicates that differences in technological bias may be a vital factor in TFP differences. Further, we test the connection between GVC and regional TFP differences, providing a new explanation from the perspective of technological bias. Due to different speeds of factors mobility, GVC can intensify regional factor cost disparities, thereby expanding technological bias differences. As a result, it impedes regional TFP convergence. Finally, we have tested the above mechanism using data from China.