Economic globalization has driven the rise of GVCs and GINs, representing the internationalization of production and innovation, respectively. Firms outsource activities to reduce costs and concentrate on core competencies, leading to geographically dispersed production processes in GVCs. Simultaneously, R&D activities have become increasingly internationalized, facilitated by open innovation and the need for access to diverse knowledge and technologies. This collaborative approach results in GINs, where firms leverage external partnerships for innovation. While the impact of innovation on GVC upgrading is established, the link between GINs and GVCs remains under-explored. This paper addresses this gap by examining whether a country's integration into a GIN leads to an improved GVC position and by exploring the mechanisms underlying this relationship. The existing literature presents mixed findings, with some studies suggesting a positive impact of GINs on GVC upgrading through knowledge flow and industry linkages, while others highlight the potential for unequal partnerships and value capture by developed economies. This study aims to provide a comprehensive empirical analysis using a network perspective to address the limitations of previous research, which often relied on case studies and lacked a globalized approach.

The literature review examines the concepts of global innovation networks (GINs) and global value chains (GVCs). GINs are defined as networks integrating decentralized engineering applications, product development, and R&D across organizational and regional boundaries, facilitating knowledge transfer and technology diffusion. The review also explores different interpretations of GINs, highlighting geographic breadth, network scope, and outcomes. GVCs are discussed as cross-business network organizations integrating production, sales, and recycling processes to create and realize value globally. The review highlights the importance of GVC upgrading, including process, product, function, and chain upgrading, focusing on the role of innovation in this process. The relationship between GINs and GVCs is explored, examining how international innovation cooperation can influence an economy's position in GVCs through knowledge flow, industry linkage, and human resource flow effects.

This study employs social network analysis and econometric modeling to investigate the relationship between GINs and GVCs. Using patent cooperation data from the World Intellectual Property Organization (WIPO), the authors construct a global innovation cooperation network for 46 countries, representing a significant portion of global GDP and participation in GVCs. Network characteristics, including degree centrality, eigenvector centrality, network linkage strength (node strength), and network structural holes (constraint), are calculated. The GVC position is measured using a formula based on the value-added trade data from the OECD's Trade in Value Added (TiVA) database. The study uses an econometric model with GVC position as the dependent variable and network characteristics as key explanatory variables, controlling for factors such as GDP, trade openness, population, fixed capital formation, and R&D investment. Fixed-effects models are employed to account for country and time effects. Robustness checks are performed using one-year lagged variables as instrumental variables to address potential endogeneity concerns. Heterogeneity analysis is conducted to examine the varying impacts across developed, emerging, and developing economies. The study employs Ucinet 6.0 software for network analysis and statistical software for econometric analysis.

The baseline regression analysis reveals significant relationships between GIN characteristics and GVC status. Network linkage strength is positively associated with GVC position, while the network structure hole (constraint) shows a negative relationship. Interestingly, degree centrality's effect is insignificant without controls but becomes significantly negative when controls are included, implying that extensive innovation partnerships are not beneficial to GVC status enhancement without considering partner innovation capacity. To address this, eigenvector centrality is introduced, showing a significantly positive effect on GVC status; thus, broader innovation cooperation with more innovative countries is beneficial for GVC positioning. Robustness tests, using lagged variables as instrumental variables and an alternative GVC position measurement (domestic value added), confirm these findings. The heterogeneity analysis reveals significant differences across country types. For developed countries, the findings align with the baseline results. However, for emerging economies, the results indicate that focusing on autonomous innovation is more beneficial for GVC upgrading than extensive international collaboration due to potential technological blockage by developed nations and the need for emerging nations to innovate in basic sectors for upgrading. Developing countries, in contrast, benefit from increased international innovation exchanges and participation in global R&D due to their weak innovation ecosystems.

The findings highlight the complex and nuanced relationship between GINs and GVCs, underscoring the importance of considering country-specific contexts and innovation capabilities. The negative impact of degree centrality in the absence of partner innovation capacity suggests that simply participating in numerous partnerships is not sufficient; the quality and strategic nature of collaborations matter. The positive effect of eigenvector centrality emphasizes the importance of cooperating with highly innovative partners for GVC upgrading. The differing results across developed, emerging, and developing economies highlight the need for tailored strategies for GVC upgrading. Developed countries can leverage their strengths in GINs to enhance their GVC positions. Emerging economies might need to focus more on autonomous innovation and less on extensive international partnerships. Developing economies, conversely, may benefit from enhanced integration into GINs to overcome their weak innovation ecosystems.

This study contributes significantly to understanding the interplay between GINs and GVCs. It provides empirical evidence supporting the complex relationship between GIN characteristics and GVC status, differentiating the effects across diverse economies. Future research could investigate other dimensions of GINs and GVCs, delve deeper into specific industries, and analyze the dynamics of value capture and distribution within these networks. The findings also have implications for policymakers in designing strategies to promote technological innovation and upgrading within GVCs.

The study is limited by the data used, primarily relying on patent cooperation data to represent innovation collaboration. This may not fully capture all forms of innovation partnerships. Furthermore, the GVC position measure, while sophisticated, might still have limitations in capturing the full complexity of a country's participation in global value chains. Future research might explore alternative data sources and GVC measurement approaches to address these limitations.