Effect of input servitization on carbon mitigation: evidence from China's manufacturing industry.

Abstract

Manufacturing servitization, a new industrial form that integrates manufacturing and service, promotes not only high-quality economic development but also carbon mitigation. By employing the panel data of 14 manufacturing sectors and 17 service sectors from 1995 to 2009 in China, this study sheds light on the effect of manufacturing input servitization on carbon reduction. Results show that input servitization reduces carbon intensity. In terms of the manufacturing heterogeneity, the carbon abatement effect of input servitization in pollution-intensive sectors is greater than that in non-pollution sectors; with respect to the service heterogeneity, more emphasis shall be placed on transportation and business services among all manufacturing industries to curb carbon emissions. Furthermore, the mechanism analysis demonstrates that input servitization reduces carbon intensity by substituting energy elements, promoting technological innovation, and optimizing structure. These conclusions reveal that increasing the level of input servitization helps to coordinate manufacturing industry's development with carbon abatement commitmentin China.