Global Value Chains, Governance, and Upgrading Processes: Firm-Level Evidence from Italy

This paper contributes to recent studies on Global Value Chains (GVCs) by empirically testing the effect of GVC belonging on firms ’ upgrading capacity. We address this issue by focusing on the Italian experience and implementing a novel approach to identify GVCs and their forms of governance. Our findings support the existence of upgrading premia for firms in GVCs, but mainly confined to final producers and relational suppliers. Even after controlling for a rich set of firm-specific observable and unobservable factors, we find significant effects on firms ’ performance, as well as on the extensive and intensive margins of innovation, R&D, and export