Does global value chain position affect innovation performance of China's high-tech industries?

Purpose Because of the rapid progress of global value chains (GVCs), it is worthwhile to study their impact on innovation. This study aims to explore the impact of GVC position of high-tech industries in the developing-country context of China on innovation performance; it also aims to explore the moderating effects of industrial agglomeration (specialization agglomeration and diversification agglomeration) on the relationship between GVC position and innovation performance. Design/methodology/approach The study is based on data gathered on Chinese high-tech industries in 30 provinces from the 2005-2015 period. The econometric analysis relies on merged data from the China Premium Database and the Trade in Value Added 2018 Database. Findings The regression results show that GVC position of China's high-tech industries significantly affects their innovation performance, and both specialization agglomeration and diversification agglomeration significantly enhance the positive relationship between GVC position and innovation performance of China's high-tech industries. After dividing the country into coastal and inland regions, new findings appear. Originality/value This study highlights the importance of GVC position and its effect on innovation performance of China's high-tech industries. It contributes to the literature on the relationship between GVCs and innovation by elaborating on the moderating effects of industrial agglomeration on this relationship.