Digitalization, Positioning in Global Value Chain and Carbon Emissions Embodied in Exports: Evidence from Global Manufacturing Production-Based Emissions

Jul 10, 2026

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Digitalization and global value chain (GVC) positioning jointly shape carbon emissions embodied in exports (CEEE). Using high-dimensional fixed-effect models with three-dimensional panel data across 18 manufacturing industries in 38 economies from 2000–2014, the study finds an inverted U-shaped relationship between digitalization and CEEE. Upgrading GVC position significantly reduces CEEE, with stronger effects in developed countries and earlier decline for high-tech industries. Nonlinear moderation results indicate that better GVC positioning flattens the curve and shifts its turning point leftward.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages13

Reading Time33 min

Introduction

Research motivation and background

Link between GVC, trade, and carbon leakage

Role of digitalization in production segmentation

Article findings (from abstract)

Inverted U-shaped digitalization–CEEE relationship

Impact of GVC position upgrading

Heterogeneity by development level and industry type

Nonlinear moderating effects

Ecological Economics 205 (2023) 107674 Contents lists available at ScienceDirect Ecological Economics journal [homepage: www.elsevier.com/locate/ecolecon](homepage: www.elsevier.com/locate/ecolecon) | Digitalization, positioning in global value chain and carbon emissions embodied in exports: Evidence from global manufacturing production-based emissions | | | | | --- | --- | --- | --- | | Yongming Huang a, Yanan Zhang b, *<br>a China Institute of Development Strategy and Planning, and Center for Industrial Economics, Wuhan University, 430072 Wuhan, China b School of Economics and Management, and Center for Industrial Economics, Wuhan University, 430072 Wuhan, China | | | | | A R T I C L E I N F O | | A B S T R A C T | | | Keywords: Digitalization Global value chain<br>Carbon emissions embodied in exports High-dimensional fixed effect Moderating effect | | 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. | | 1. Introduction The emergence of global value chain (GVC) and digitalization have significantly altered the structure of international trade and global production in recent decades, with implications for climate change (World Bank, 2019). It is well known that GVC has both beneficial and detrimental environmental effects. GVC necessitates more shipping and generates more emissions than those of conventional trade, causing industries to relocate (from developed countries with strict environmental regulations) to jurisdictions (typically developing countries) with morelax environmental regulations and lower manufacturing costs (World Bank, 2019). Such production relocations have significant environmental consequences and result in a substantial increase in the carbon emissions embodied in exports (CEEE) of developing countries (see Fig. 1). It is estimated one-fourth of global emissions are associated with international trade, with significant emissions transferred from developed to developing countries (Peters et al., 2011). What is more, due to the low position of developing countries and emerging economies in GVC, there is a serious asymmetry between their economic benefits and environmental costs (Liu et al., 2018a), posing serious challenges to sustainable development. The phenomenal growth in GVC trade has been closely linked to digitalization, which enables production to be segmented while maintaining communication among geographically dispersed production segments (Rodrik, 2018). Owing to digitalization, the cost of international trade has significantly decreased, making it easier to coordinate Abbrevia

FAQs

What relationship does digitalization have with carbon emissions embodied in exports (CEEE)?

The study reports an inverted U-shaped relationship: CEEE first increases and then decreases as digitalization advances.

How does upgrading a country’s GVC position affect CEEE?

Improving GVC position significantly reduces CEEE, and the moderation effect flattens the inverted U-shaped curve and shifts the turning point to the left.

Do the effects differ across countries and industries?

Yes. Compared with developing countries, developed countries more readily move into the downward phase, and high-tech industries enter the decline stage earlier than low-tech industries.

Jul 10, 2026

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