The study attempts to explore the dynamic interlinkages among foreign direct investment (FDI) inflows, informational globalisation (ING) and global value chain (GVC) empirically in the G20 nations from 1990 to 2019. The trade and growth effects of FDI are widely discussed in theoretical and empirical literature in the context of globalisation in different countries and regions. The noteworthy progress of information and communication technologies (ICT) has also been a substantial factor in the FDI-trade-growth relationship, as observed in various contemporary studies. However, the existing studies cannot provide a suitable answer with explicit scenarios regarding the relationship between FDI and GVC in the context of the latest form of global trade in the era of ING, which encompasses both globalisation and digitalisation. To conduct the empirical exercises examining the dynamic relationships among FDI, ING and GVC, the study chooses G20 nations, which represent around 85% of the global gross domestic product (GDP), over 75% of the global trade and FDI flows, and about two-thirds of the world’s population (OECD, 2022, Twenty-eighth report on G20 investment measures). World Bank (2022, World Development Indicators (WDI)) provides country-wise annual data on FDI. The year-wise quantitative measures of the ING for selected countries are obtained from the KOF Globalisation Index (2022, KOF Globalisation Index 2020). The study collects country-wise yearly data on GVC from the UNCTAD-Eora (2023, UNCTAD-Eora global value chain database) GVC database. In the panel cointegration and vector error correction mechanism (VECM) framework, the empirical estimations applying the panel fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods reveal the bidirectional causality between FDI and GVC and FDI and ING, and unidirectional causality between ING and GVC in G20 economies.
AddisonT., & HeshmatiA. (2003). The new global determinants of FDI flows to developing countries: The importance of ICT and democratization[No. 2003/45, WIDER Discussion Paper]. WIDER.
2.
AgrawalP., MathadK., SenP., & MukherjeeS. (2024). The game-changing role of the Internet of Things (IoT) in the global value chain (GVC) in India. In Smart global value chain (pp. 65–78). CRC Press.
3.
AkaikeH. (1969). Fitting autoregressive models for prediction. Annals of the Institute of Statistical Mathematics, 21(1), 243–247.
4.
AliI., HoW., PapadopoulosT., & WhiteC. (2026). Introduction to global value chains and geopolitical turmoil. In Global value chains and geopolitical uncertainty (pp. 1–16). Routledge.
5.
Añón HigónD., MáñezJ. A., SanchisA., & SanchisJ. A. (2025). Digitalisation and global value chain participation: Evidence from Spanish manufacturing firms. Industry and Innovation, 33, 1–36.
6.
AntràsP., & ChorD. (2022). Global value chains. Handbook of International Economics, 5, 297–376.
7.
AroraK. (2023). Developing linkages between technology-intensive exports and GVC participation: A perspective from India and G20 countries. International Review of Applied Economics, 37(6), 804–827.
8.
ArvinM. B., PradhanR. P., & NairM. (2021). Uncovering interlinks among ICT connectivity and penetration, trade openness, foreign direct investment, and economic growth: The case of the G-20 countries. Telematics and Informatics, 60, 101567.
9.
AuboinM., KoopmanR., & XuA. (2021). Trade and innovation policies: Coexistence and spillovers. Journal of Policy Modeling, 43(4), 844–872.
10.
BaumC. (2003). HADRILM: Stata module to perform Hadri panel unit root test(Statistical Software Components No. S419701). Boston College Department of Economics.
11.
BreuerJ. B., McNownR., & WallaceM. (2002). Series-specific unit root tests with panel data. Oxford Bulletin of Economics and Statistics, 64(5), 527–546.
12.
BuckleyP. J., StrangeR., TimmerM. P., & de VriesG. J. (2022). Rent appropriation in global value chains: The past, present, and future of intangible assets. Global Strategy Journal, 12(4), 679–696.
13.
CasellaB., BolwijnR., MoranD., & KanemotoK. (2019). Improving the analysis of global value chains: The UNCTAD-Eora database. Transnational Corporations, 26(3), 115–142.
14.
ChangY., IakovouE., & ShiW. (2020). Blockchain in global supply chains and cross border trade: A critical synthesis of the state-of-the-art, challenges and opportunities. International Journal of Production Research, 58(7), 2082–2099.
15.
ChoiJ., HinojalesM. M., HongS. H., & VichyanondJ. (2021). The role of Vietnam’s FDI inflows in global value chains participation and economic growth. ASEAN+ 3 Macroeconomic Research Office.
16.
ChoiB., RohT., ParkB. I., & ParkJ. (2025). Complementary perspectives on knowledge-and market-seeking outward FDI of EMNEs: A review and agenda for future research. Cross Cultural & Strategic Management, 32(1), 176–207.
17.
CianiA., & GregoriW. D. (2022). Participation in global value chains and M&A flows[No. 2022/9, JRC Working Papers in Economics and Finance]. JRC.
18.
CrescenziR., & HarmanO. (2023). Harnessing Global Value Chains for regional development: How to upgrade through regional policy, FDI and trade. Taylor & Francis.
19.
DasA. (2023). Developing dynamic digital capabilities in micro-multinationals through platform ecosystems: Assessing the role of trust in algorithmic smart contracts. Journal of International Entrepreneurship, 21(2), 157–179.
20.
FambeuA. H., & TsambouA. D. (2025). Foreign direct investment and global value chains in Sub-Saharan African firms. International Journal of the Economics of Business. https://doi.org/10.1080/13571516.2025.2541114
21.
FindlayC., & HoekmanB. (2021). Value chain approaches to reducing policy spillovers on international business. Journal of International Business Policy, 4(3), 390–409.
22.
GammeltoftP., & HobdariB. (2017). Emerging market multinationals, international knowledge flows and innovation. International Journal of Technology Management, 74(1–4), 1–22.
23.
GiroudA., & MirzaH. (2015). Refining of FDI motivations by integrating global value chains’ considerations. The Multinational Business Review, 23(1), 67–76.
24.
GiuntaA., MarvasiE., & SforzaM. (2025). Digitalization and regionalization of Global Value Chains in European industries. Journal of Industrial and Business Economics, 52, 1–30.
25.
GrangerC. W. J. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424–438.
26.
GrimesS., & YangC. (2018). From foreign technology dependence towards greater innovation autonomy: China’s integration into the information and communications technology (ICT) global value chain (GVC). Area Development and Policy, 3(1), 132–148.
27.
HaL. T. (2024). Impacts of digital business on global value chain participation in European countries. AI & Society, 39(3), 1039–1064.
28.
HadriK. (2000). Testing for stationarity in heterogeneous panel data. The Econometrics Journal, 3(2), 148–161.
29.
HaelgF. (2022). Drivers of financial globalisation: The role of informational frictions. The World Economy, 45(3), 608–636.
30.
HausmanJ. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251–1271.
31.
HoekmanB., & SanfilippoM. (2023). Trade and value chain participation: Domestic firms and FDI spillovers in Africa. The World Economy, 46(11), 3367–3391.
32.
HuG. G. (2021). Is knowledge spillover from human capital investment a catalyst for technological innovation? The curious case of fourth industrial revolution in BRICS economies. Technological Forecasting and Social Change, 162, 120327.
33.
ImK. S., PesaranM. H., & ShinY. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53–74.
34.
JaaxA., & MiroudotS. (2021). Capturing value in GVCs through intangible assets: The role of the trade–investment–intellectual property nexus. Journal of International Business Policy, 4(3), 433–452.
35.
JangamB. P., & RathB. N. (2021). Do global value chains enhance or slog economic growth?Applied Economics, 53(36), 4148–4165.
36.
JiX., & LimG. (2022). The Chinese way of reforming global economic governance: An analysis of China’s rising role in the Group of Twenty (G-20). The Chinese Economy, 55(4), 282–292.
37.
JohansenS. (1995). Identifying restrictions of linear equations with applications to simultaneous equations and cointegration. Journal of Econometrics, 69(1), 111–132.
38.
JudeC. (2016). Technology spillovers from FDI. Evidence on the intensity of different spillover channels. The World Economy, 39(12), 1947–1973.
39.
KanoL., TsangE. W., & YeungH. W. C. (2020). Global value chains: A review of the multi-disciplinary literature. Journal of International Business Studies, 51, 577–622.
40.
KarimiJ., & KonsynskiB. R. (1991). Globalization and information management strategies. Journal of Management Information Systems, 7(4), 7–26.
41.
KartskhiyaA. A., TyrtychnyyS. A., SmirnovM. G., DolgikhM. G., & KhmelnitskiyL. A. (2020). Digital technologies in supply chain management for production and digital economy development. International Journal of Supply Chain Management, 9(3), 912–918.
42.
Kersan-ŠkabićI. (2022). The COVID-19 pandemic and the internationalization of production: A review of the literature. Development Policy Review, 40(2), e12560.
43.
KhraishiA., PaulrajA., HuqF., & SeepanaC. (2023). Knowledge management in offshoring innovation by SMEs: Role of internal knowledge creation capability, absorptive capacity and formal knowledge-sharing routines. Supply Chain Management: An International Journal, 28(2), 405–422.
44.
KiminoS. (2025). What drives global value chains of FDI at sub-national regions? Roles of agglomeration economies. European Planning Studies, 33(2), 204–225.
45.
KOF Globalisation Index. (2022). KOF Globalisation Index 2020. KOF Swiss Economic Institute. https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html
46.
LabidiM. A., OchiA., & SaidiY. (2024). Relationship analysis between FDI and economic growth in African Countries: Does governance quality matter?Journal of the Knowledge Economy, 15, 1–30.
47.
LevinA., LinC. F., & ChuC. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1–24.
48.
LiP., ChenY., & GuoX. (2025). Digital transformation and supply chain resilience. International Review of Economics & Finance, 99, 104033.
49.
LiZ., LaiQ., & HeJ. (2024). Does digital technology enhance the global value chain position?Borsa Istanbul Review, 24(4), 856–868.
50.
LiB., ShiZ., & GuoW. (2024). The global foreign direct investment network: Evolution and influencing factors. Kybernetes, 53(3), 841–861.
51.
LiB., XuC., WangY., ZhaoY., ZhouQ., & XingX. (2024). Digital transformation, supply chain collaboration, and enterprise growth: Theoretical logic and Chinese practice. European Research on Management and Business Economics, 30(2), 100249.
52.
LiuX., & GiroudA. (2016). International knowledge flows in the context of emerging-economy MNEs and increasing global mobility. International Business Review, 25(1), 125–129.
53.
LoonamJ., & O’ReganN. (2022). Global value chains and digital platforms: Implications for strategy. Strategic Change, 31(1), 161–177.
54.
LuoY. (2021). New OLI advantages in digital globalization. International Business Review, 30(2), 101797.
55.
MaddalaG. S., & WuS. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S1), 631–652.
56.
MaloneyW., BeylisG., Riera-CrichtonD., & VuletinG. (2023). The promise of integration: Opportunities in a changing global economy. World Bank Publications.
57.
Martínez-GalánE., & FontouraM. P. (2019). Global value chains and inward foreign direct investment in the 2000s. The World Economy, 42(1), 175–196.
58.
McWilliamS. E., KimJ. K., MudambiR., & NielsenB. B. (2020). Global value chain governance: Intersections with international business. Journal of World Business, 55(4), 101067.
59.
MetuliniR., RiccaboniM., SgrignoliP., & ZhuZ. (2017). The indirect effects of foreign direct investment on trade: A network perspective. The World Economy, 40(10), 2193–2225.
60.
Mirzaye ShirkoohiS., & MohiuddinM. (2025). Creating value in metaverse-driven global value chains: Blockchain integration and the evolution of international business. Journal of Theoretical and Applied Electronic Commerce Research, 20(2), 126.
61.
MitraS., GuptaA. S., & SanganeriaA. (2020). Drivers and benefits of enhancing participation in global value chains lessons for India[ADB South Asia Working Paper Series, 79]. ADB.
62.
ModyA., RazinA., & SadkaE. (2003). The role of information in driving FDI flows: Host-country transparency and source country specialization[Working Paper No. 9662, NBER Working Paper Series]. http://www.nber.org/papers/w9662
63.
MurakamiY., & OtsukaK. (2020). Governance, information spillovers, and productivity of local firms: Toward an integrated approach to foreign direct investment and global value chains. The Developing Economies, 58(2), 134–174.
64.
OECD (Organization for Economic Cooperation and Development). (2022). Twenty-eighth report on G20 investment measures. UNCTAD.
65.
OlaniyiC. O., & OdhiamboN. M. (2023). Do countries’ interdependence, asymmetry, and policy variances matter in the remittance-poverty causal nexus?The Journal of International Trade & Economic Development, 33, 1–39.
66.
Opazo-BasáezM., Vendrell-HerreroF., BustinzaO. F., & MarićJ. (2022). Global value chain breadth and firm productivity: The enhancing effect of Industry 4.0. Journal of Manufacturing Technology Management, 33(4), 785–804.
67.
PanS., & ChongZ. (2023). Effects of FDI on trade among countries along the Belt and Road: A network perspective. The Journal of International Trade & Economic Development, 32(1), 84–103.
68.
PavlínekP. (2024). Geopolitical decoupling in global production networks. Economic Geography, 100(2), 138–169.
69.
PedroniP. (2001). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727–731.
70.
PedroniP. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20(3), 597–625.
71.
PersynD., & WesterlundJ. (2008). Error-correction-based cointegration tests for panel data. Stata Journal, 8(2), 232–241.
72.
PesaranM. H. (2007). A simple panel unit root test in the presence of cross section dependence, Journal of Applied Econometrics, 22(2), 265–312.
73.
PesaranM. H., ShinY., & SmithR. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621–634.
74.
PesaranM. H., & SmithR. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79–113.
75.
PhillipsP. C., & SulD. (2003). Dynamic panel estimation and homogeneity testing under cross section dependence. The Econometrics Journal, 6(1), 217–259.
76.
Pla-BarberJ., Pallás-RocafullA., Botella-AndreuA., & VillarC. (2025). Strategies for high-performing SMEs in traditional manufacturing GVCs. In Global value chains and competitiveness: How manufacturers build resilience against global disruptions (pp. 97–115). Springer International Publishing.
PradhanR. P., ArvinM. B., NairM., HallJ. H., & BennettS. E. (2022). Institutional development in an information-driven economy: Can ICTs enhance economic growth for low- and lower middle-income countries?Information Technology for Development, 28(3), 468–487.
79.
QiangC. Z., LiuY., & SteenbergenV. (2021). An investment perspective on global value chains. World Bank Publications.
80.
RahmanN., & SharmaK. (2025). Does over-regulation and outward FDI deter global value chain participation in regional trade agreements?International Economics and Economic Policy, 22(4), 51.
81.
ReddyK., & SasidharanS. (2023). Digitalization and global value chain participation: Firm-level evidence from Indian manufacturing. Journal of Industrial and Business Economics, 50(3), 551–574.
82.
ReddyK., SasidharanS., & ThangaveluS. (2023). Does servicification of manufacturing increase the GVC activities of firms? Case of India. The World Economy, 46(1), 153–181.
83.
RundassaW., & AzeneD. (2018). Global value chain evolution, feature and significance: Literature review. Journal of Social Sciences, 4, 1.
84.
SinghD., KeshariA., & GautamA. (2024). International trade and investment: A review and research agenda. Global Business and Organizational Excellence, 43(5), 81–112.
85.
SkareM., & SorianoD. R. (2021). How globalization is changing digital technology adoption: An international perspective. Journal of Innovation & Knowledge, 6(4), 222–233.
86.
SudanT., & TaggarR. (2025). Assessing trade supply chain vulnerability and trade participation of SMEs in India: Insights from a comprehensive analysis. International Journal of Productivity and Performance Management, 74(1), 250–303.
87.
TysonL. D. A., ZysmanJ., & JudgeB. (2023). The new logic of globalization: Uncertainty, volatility, and the digital economy. University of California, Berkeley Roundtable on the International Economy.
88.
UNCTAD. (2023). (UNCTAD/DITC/INF/2023/3). United Nations.
89.
UNCTAD. (2024). Digital economy report 2024: Shaping an environmentally sustainable and inclusive digital future(UNCTAD/DER/2024, No. Sales No. E.24.II.D.12). United Nations.
90.
UNCTAD-Eora. (2023). UNCTAD-Eora global value chain database. https://worldmrio.com/unctadgvc/
91.
WangJ., YangJ., & YangL. (2023). Do natural resources play a role in economic development? Role of institutional quality, trade openness, and FDI. Resources Policy, 81, 103294.
92.
Wald, A. (1943). Tests of statistical hypotheses concerning several parameters when the number of observations is large. Transactions of the American Mathematical Society, 54(3), 426-482.
93.
World Bank. (2021). Digital economy for development: Global value chains and investment trends.
94.
World Bank. (2022). World Development Indicators (WDI).
95.
WuS., & NiuR. (2025). How GVC embeddedness affects firms’ innovation level: Evidence from Chinese listed companies. Economics, 19(1), 20250151.
96.
WuH., WangX., KhalidZ., & ElahiE. (2024). The digital trade advantage: Investigating the impact on global value chain positions in manufacturing and service industries. Applied Economics, 57, 1–16.
97.
YuD., WangZ., & NadeemM. (2024). Assessing the predictive ability of information globalization under global value chains-environmental sustainability nexus in the BRICS economies: A nonparametric causality approach. Natural Resources Forum. https://doi.org/10.1111/1477-8947.12500
98.
ZekosG. I. (2021). E-globalization and digital economy. In Economics and law of artificial intelligence: Finance, economic impacts, risk management and governance (pp. 13–66). Springer International Publishing.
99.
ZhaoZ., & GaoG. (2024). The impact of digital trade on China’s position in the GVC: An empirical analysis based on Sino-Russian cross-border panel data. Sustainability, 16(13), 5493.
