Abstract
The global value chain (GVC) had brought different pattern to the environment impact of trade. Thus, exploring the effect of participation in GVCs on firms’ environmental performance is of great significance. Using micro data on Chinese industrial firms between 2000 and 2013, we investigate the degree of vertical specialization in their sulfur dioxide (SO2) emission intensity. The results showed that the higher degree of vertical integration in GVCs is conducive to decreasing SO2 emission intensity through the channels of imported intermediate inputs and enhancement coal-use efficiency. Besides, we construct two different instrument variables to mitigate the endogeneity problem, along with a series of robustness and heterogeneity tests. This study contributes to the literature on the effect of GVC trade on the environment by providing firm-level evidence from China.
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