Empirical studies on onnovation, automation and changing economic dynamics in global value chains

This dissertation bridges innovation economics and international trade to examine how innovation both emerges from and reshapes global value chains (GVCs). It advances our understanding of the dual role of innovation: as an outcome of participation in fragmented production networks and as a driver of changing dynamics within them. Central questions include whether GVCs continue to function as mechanisms of knowledge diffusion at the industry level, and how automation—particularly the adoption of industrial robots—alters employment linkages and value capture within GVCs. The findings show that participating in GVCs fosters learning and knowledge spillovers across industries represented in patenting activity, with the level of an industry’s absorptive capacity playing a decisive role in translating international exposure into innovation gains. Additionally, the dissertation shows that automation reorganizes rather than reverses globalization. The dissertation does not find strong evidence that the adoption of robots in advanced manufacturing economies systematically reduces demand for foreign labor through import linkages. Any short-term decline in employment embodied in trade is temporary and offset by longer-term productivity gains. Furthermore, automation strengthens forward GVC participation and upstream integration. This enables industries to expand their role as suppliers of intermediate goods and capture a larger share of value-added in foreign exports. However, automation does not lead to a general increase in dependence on foreign inputs, although it can intensify interdependence within the same industry. Overall, the dissertation contributes to the empirical literature on innovation and global value chains by showing that innovation and automation reshape specialization patterns and value distribution within GVCs while preserving their role as channels of international knowledge diffusion and economic interdependence.