Global value chain embeddedness and innovation efficiency in China

Combined with the global value chain (GVC) and the innovation value chain, this study analyses whether and how global value chain participation (GVCPA) and global value chain position (GVCPO) affect innovation efficiency (IE) to explain the difference of IE in China's provinces from 2005 to 2016. It uses Stochastic Frontier Analysis to examine the influencing factors of IE. Results show that both GVCPA and GVCPO are important factors influencing IE, with GVCPA promoting IE and GVCPO inhibiting IE. Moreover, human capital (HC) positively affects the relationship between GVCPO and commercialisation efficiency as well as the relationship between GVCPA and R&D efficiency. The findings suggest that a region should not only encourage industrial enterprises to be embedded in the GVC but also develop education and improve the quality of HC.