Inter-Regional Tech Complementarity: A Mechanism for Balanced Development and GVC Upgrading

Zheng Jianghuai1,2,3, Jin Shengnan*1,3

1 Laboratory of Data Intelligence and Interdisciplinary Innovation, Nanjing University, Nanjing, China

2 Yangtze River Delta Economic and Social Development Research Center, Nanjing University

3 School of Economics, Nanjing University

Abstract: In the complex architecture of global value-chain (GVC) trade, firms’ technological content increasingly reflects external knowledge flows. This study examines how inter-regional technological complementarity shapes firms’ GVC advancement, measured by the domestic value-added rate (DVAR) in exports. Using integrated Chinese microdata (2000-2014), we find this complementarity significantly boosts export DVAR, explaining about one-quarter of its observed growth. Two mechanisms drive this effect: increased use of domestic intermediates and gains in firm productivity. The benefits are especially large for firms with lower human capital and for those in accessible, innovation-peripheral regions, helping narrow productivity gaps across firms and space. Affected firms also exhibit broader export scopes, higher product quality, more diversified destinations, and greater markups—firm-level evidence of GVC upgrading. These findings highlight how external technological linkages drive upgrading and underscore the importance of fostering inter-regional synergies for balanced development.

Keywords: technological complementarity; global value chains; domestic value

JEL Classification Codes: D24; F10; O33

DOI: 10.19602/j.chinaeconomist.2026.01.01