Digitalization, positioning in global value chain and carbon emissions embodied in exports: Evidence from global manufacturing production-based emissions

Digitalization and the emergence of global value chain (GVC) have been the two most significant changes affecting international trade in recent decades. This study examines the impact of digitalization and the position of GVC on carbon emissions embodied in exports (CEEE). In doing so, we use high-dimensional fixed-effect models and three-dimensional panel data covering 18 manufacturing industries in 38 economies from 2000 to 2014. The results show that digitalization and CEEE have an inverted U-shaped relationship, and upgrading GVC position can significantly reduce CEEE. Compared with developing countries, developed countries are prone to enter the downward phase of the inverted U-shaped curve through digitalization, thereby curbing CEEE. Similarly, high-tech industries enter the decline stage of the inverted U-shaped curve earlier than low-tech industries in digitalization process. In addition, improvements in GVC position in developed countries (or high-tech industries) have a greater impact on CEEE reduction than in developing countries (or low-tech industries). Finally, the results of nonlinear moderating effect model indicate that upgrading GVC's position flattens (or positively moderates) the inverted U-shaped curve and shifts the curve's turning point to the left. An important implication of our findings is that a country should actively raise its GVC position while focusing on digitalization for the goal of sustainable development.

Automated summary

Digitalization and the emergence of global value chain (GVC) have had a significant impact on international trade. This study examines the relationship between digitalization, GVC position, and carbon emissions embodied in exports (CEEE). The results show an inverted U-shaped relationship between digitalization and CEEE, with upgrading GVC position leading to significant CEEE reduction. Developed countries are more likely to enter the downward phase of the inverted U-shaped curve through digitalization, curbing CEEE. High-tech industries enter the decline stage earlier than low-tech industries. Improving GVC position has a greater impact on CEEE reduction in developed countries and high-tech industries compared to developing countries and low-tech industries. Upgrading GVC position flattens the inverted U-shaped curve and shifts its turning point to the left. The findings imply that countries should actively raise their GVC position while focusing on digitalization for sustainable development.