Material footprints in global value chains with consideration of multinational enterprises

Abstract

The world has witnessed an unprecedented growth in extraction of materials and natural resources in the past few decades. The emerging of multinational enterprises has dramatically challenged the understanding of materials along Global Value Chains. To have a full picture of world material footprints, it is essential to understand to what extent materials are re-distributed by trade and investments. This study employs an Environmental-Extended multi-regional Input-Output approach with explicit consideration on multinational enterprises to trace the embodied material flows along Global Value Chains. The results show that both the outsourcing and offshoring of production by trade and the overseas investments by multinational enterprises contribute to the surging material extraction in developing countries. The results also highlight the role of fixed capital formation in driving the increase of the material footprints. The sustainable development goals call for collaboration of all nations with more focuses on the role of multinational enterprises.