Firm's position in global value chains and its impact on pollutant emissions: Evidence from Chinese manufacturing firms

Abstract

This paper studies examines how a firm's position in the global value chain affects its pollutant emissions. This paper integrates China's firm-level trade data into China's multi-regional input-output tables to provide an index to measure a firm's position in global value chains. Based on a firm-level pollution dataset (2000–2014) in China, this paper conducts an empirical analysis and find that the most-downstream firms on the global value chain have lower pollutant emission intensity. Our results also suggest that the production factor structure effect, the knowledge absorption effect and the abatement investment effect together contribute to the emission intensity gap between the most-upstream firms and the most-downstream firms. These novel results are significant in guiding firms towards reducing their emissions and promoting a green global value chain, with the ultimate goal of achieving multinational environmental protection.