Global value chain and export-embodied carbon emissions: New evidence from foreign-invested enterprises

Based on a new accounting and decomposition framework for the carbon emissions of foreign-invested enterprises (FIEs), this study analyzed the global value chain (GVC) characteristics of FIEs' export-embodied carbon emissions and empirically examined the impact of GVC linkages on FIEs' export-embodied carbon emissions. Panel data covering 59 economies from 2005 to 2016 were used. The results showed that export-embodied carbon emissions accounted for approximately 40% of FIEs' emissions, and most were related to intermediate product trade, especially simple GVC activities. The empirical analysis indicated that GVC linkages between host and importing countries positively affected FIEs' export-embodied carbon emissions, and that the positive effect was heterogeneous in different trade patterns and GVC activities. The mechanism analysis suggested that GVC linkages increased FIEs' export-embodied carbon emissions due to export scale and carbon composition effects. This new evidence highlights the importance of FIEs in constructing green GVC.