Can the extension of the global value chain production length promote carbon emissions reduction in China's equipment manufacturing industry?

Abstract

In the context of localization of Global Value Chain (GVC) and stricter carbon emission requirements, the impact of participating in GVC on carbon emission reduction has become one of the most crucial criteria for China's manufacturing industry to consider whether to deepen its participation in GVC. In order to clearly and directly reflect the change in the production distance between the original input and the final product, we use the GVC production length to express the degree of participation in GVC. And in order to make the research more targeted and typical, we select the equipment manufacturing industry as the research object. Using the data from the World Input-Output Database (WIOD), we empirically analyze the GVC production length under different cross-border production activities on the basis of the theoretical mechanism. The results show that the extension of the GVC production length can significantly promote the carbon emissions reduction. In the decomposition part, the extension of simple GVC production length can effectively promote carbon emissions reduction. Therefore, it is suggested that China's equipment manufacturing industry should continue to deeply participate in the high-end production links of GVC and improve its status in the complex GVC production activities.