Global value chains participation and carbon emissions embodied in exports of China: Perspective of firm heterogeneity

How ESG reporting is effected by sustainable finance and green innovation: moderating role of sales growth

In light of the conflicting findings within the existing empirical literature regarding the factors influencing environmental, social, and governance (ESG) disclosures in the context of sustainable investment and firms' green innovation performance (GIP), our current study stands out as a distinctive research endeavor that examines how the relationship is influenced by the moderating effects of sales growth. Non-financial trade manufacturing companies listed on the Shanghai and Shenzhen stock exchanges between 2015 and 2020 were selected for this study. For data estimation, panel regression estimations using OLS and fixed effects models have been used. The results demonstrate a significant moderation of manufacturing industry's sales growth in China on the relationship between ESG disclosures and sustainable finance (operationalized by green credit, and green investment), and green innovation (operationalized by R&D intensity and green patents). Several practical takeaways are offered to boost green innovation performance among ESG reporting enterprises and increase the effectiveness of R&D intensity. These findings, including policy recommendations, will benefit all stakeholders.

The fairness of shared responsibility for embodied carbon emission: a case study of the Yellow River Basin, China

Under the dual constraints of China's carbon peaking and carbon neutrality goals, as well as ecological protection and high-quality development of the Yellow River Basin, clarifying the embodied carbon emissions and responsibility sharing of inter-provincial trade is crucial to the carbon reduction strategy of the Yellow River Basin. This paper uses the MRIO (multi-regional input-output) model to measure the production-side and consumption-side responsibility sharing of nine provinces in the Yellow River Basin in 2012 and 2017, revealing the amount and direction of the embodied carbon transfer between provinces, and finally introduces the share of provincial value added as the responsibility sharing factor to compare and analyze the differences between the three responsibility sharing methods. The results show the following: (1) The embodied carbon emissions on the production side in most provinces of the Yellow River Basin were larger than that on the consumption side, with the most significant differences in Shanxi, Inner Mongolia, and Shandong, among which local demand carbon emissions and intermediate product transfer out of carbon emissions were the main causes of production-side carbon emissions. (2) In general, all provinces except Shaanxi were net carbon transfer-in regions, and the embodied carbon was mainly transferred to Beijing, Jiangsu, Guangdong, Zhejiang, and Hebei. (3) Shared responsibility for carbon emissions was jointly determined by the volume of embodied carbon trade and the ability to obtain value added, which lay between production and consumption side responsibility shares. (4) The Yellow River Basin had a large responsibility-sharing factor and embodied carbon trade, and thus needs to take more responsibility for emission reduction. This study is expected to provide scientific support for the strategy of differentiated emission reduction in the Yellow River Basin and enrich the regional carbon accounting methods.

GVCs and environmental sustainability in MENA: Do digitalization and institutions make a difference?

The advent of digitalization has brought about profound changes in the global value chain, raising significant concerns about environmental sustainability. However, the environmental consequences resulting from the interplay between global value chain participation and digitalization have not been adequately explored, particularly in the Middle East and North Africa region (MENA). To address this gap, our research delves into the impact of global value chain participation on environmental sustainability in 15 MENA countries from 1996 to 2018. We also investigate the moderating effects of two critical policy variables: digitization and institutional quality, employing the SYS-GMM Panel method and Random Effects method. Empirical findings reveal that participating in the global value chain has positive environmental implications for MENA countries. These results hold true and remain consistent when considering forward value participation linkages and oil-importing nations. Furthermore, we observe that the proposed moderators play a significant role in shaping the environmental impact of the global value chain. Specifically, institutions and global value chains work in synergy to promote environmental sustainability in MENA, encompassing both oil-importing and oil-exporting groups. However, the interaction between the global value chain and digitalization generates a negative net effect, which diminishes beyond a specific digitalization threshold of 10.23%. Consequently, implementing complementary policies becomes crucial when digitization is below this threshold. Additionally, our study supports the resource curse hypothesis for the MENA region, suggesting that natural resources contribute to environmental degradation. These insights offer valuable guidance for enhancing global value chain integration while preserving a sustainable environment in MENA.

Foreign multinationals affiliates and countries' carbon upstreamness. How could these firms support the fulfilment of emissions reduction targets?

Climate emergency requires urgent actions to reduce carbon emissions. In this paper we calculate the countries' carbon upstreamness and evaluate its linkage to the presence of foreign MNE affiliates, by using a multiregional input-output model with firm heterogeneity. We find a mismatch between carbon upstreamness, emissions reduction targets and income per capita between countries. OECD countries, which are located in the final stages of carbon production, have lower carbon intensity than the world average and have committed strongly to reducing their total emissions. On the contrary, non-OECD countries, which are located mainly in the initial stages of carbon production, maintain higher carbon intensity than the world average and they are less ambitiously committed, as they have lower per capita income. In that context, multinational enterprises (MNEs) could play a key role in supporting the fulfilment of emission reduction targets in host countries, so we propose a simulation to evaluate this role. Specifically, if the MNE affiliates adopt the Intended Nationally Determined Contributions (INDC) set by the controlling country regardless of where they are located, the emissions of MNEs would be reduced by 15.6% (395,864 KtCO₂), 4% more than they would be reduced under current emission reduction targets in 2016. However, if MNEs apply the more ambitious INDC, regardless of origin or destination, the emissions would be reduced by 18% (455,910 KtCO₂), 7% more than scenario 1 and 1.7% of global emissions in 2016.

How does export composition improvement affect carbon dioxide emissions in BRI countries? The mediating role of industrial structure upgrading and the moderating role of intellectual property protection

Climate change, caused by carbon dioxide (CO₂) emissions, has become increasingly severe and is a serious constraint on the sustainable development of the global economy. Economists are aware of the close relationship between export trade and the growth of CO₂ emissions, especially for the Belt and Road Initiative countries that are experiencing economic growth and transformation. Extant literature also agrees that the composition of the export basket is one of the crucial factors influencing CO₂ emissions, but the mechanisms by which changes in the export basket affect carbon emissions from a sustainable production perspective remain unexplored. Based on international trade theory, this study examines how shifts in production patterns affect subsequent CO₂ emissions through the lens of exogenously driven changes in the composition of a country's exports, with the consideration of the mediating role of industrial structure upgrading and the moderating role of intellectual property protection simultaneously. The results reveal that export composition improvement contributes to carbon reduction, and industrial structure upgrading plays a significant mediating role in the export composition improvement for carbon reduction. Intellectual property protection moderates the relationship between export composition improvement and industrial structure upgrading. The mediating effect of export composition improvement affecting carbon emissions reduction through industrial structure upgrading is also moderated by intellectual property protection.

Can the extension of the global value chain production length promote carbon emissions reduction in China's equipment manufacturing industry?

In the context of localization of Global Value Chain (GVC) and stricter carbon emission requirements, the impact of participating in GVC on carbon emission reduction has become one of the most crucial criteria for China's manufacturing industry to consider whether to deepen its participation in GVC. In order to clearly and directly reflect the change in the production distance between the original input and the final product, we use the GVC production length to express the degree of participation in GVC. And in order to make the research more targeted and typical, we select the equipment manufacturing industry as the research object. Using the data from the World Input-Output Database (WIOD), we empirically analyze the GVC production length under different cross-border production activities on the basis of the theoretical mechanism. The results show that the extension of the GVC production length can significantly promote the carbon emissions reduction. In the decomposition part, the extension of simple GVC production length can effectively promote carbon emissions reduction. Therefore, it is suggested that China's equipment manufacturing industry should continue to deeply participate in the high-end production links of GVC and improve its status in the complex GVC production activities.