Global value chains participation and environmental pollution in developing countries: Does digitalization matter?

The study analyses the effect of global value chains participation (GVCP) on CO2 emissions and assesses whether digitalization technologies can enhance environmental quality. We use panel data estimation techniques for 112 developing countries over the period 1990-2018. Findings show that the GVCP contributes to environmental degradation. Other factors that increase environmental damage include FDI inflows, industrial value-added and electricity consumption. However, renewable energy consumption significantly reduces CO2 emissions. Findings show that digitalization is an effective channel in reducing CO2 emissions in the GVCP in developing countries. These findings have important policy implications in exploring the GVCP's development dynamics in upgrading opportunities from digital technologies to reduce environmental pollution and promote sustainable growth in developing economies.

Automated summary

The study examines the impact of global value chains participation on CO2 emissions and investigates the potential role of digitalization technologies in improving environmental quality. By analyzing panel data from 112 developing countries between 1990 and 2018, the research finds that global value chains contribute to environmental degradation, along with other factors such as FDI inflows, industrial value-added, and electricity consumption. However, renewable energy consumption proves to be effective in reducing CO2 emissions. Moreover, the study highlights the significance of digitalization in reducing CO2 emissions within global value chains in developing countries.