Input servitization, global value chain, and carbon mitigation: An input-output perspective of global manufacturing industry

Abstract

As an emergent pattern of integration between the manufacturing and service industries, manufacturing servitization has become a global trend. While studies have explored the eco-friendly characteristics of servitization, most have overlooked the roles of global value chains (GVCs) in transmitting its carbon mitigation effects. Using cross-country industrial panel data collected from the global manufacturing industry between 2000 and 2014, this study empirically analyzes the multidimensional effects of input servitization on manufacturing carbon emissions from the input-output perspective, with attention to the mediating roles of GVCs in the servitization-emission nexus, including the underlying mechanism and transmission channels. Our results show that the carbon abatement effects of servitization are heterogeneous across different emission intensities. Further, GVC participation implicitly counteracts the carbon abatement effects of servitization, wherein backward GVC participation plays a dominant role. We therefore propose that servitization is a feasible path for coordinating high-quality economic development and resource/environmental constraints.