Global Value Chain Position and Corporate Environmental Performance: A Comparison of Domestic and Foreign Perspectives in China

Abstract

Under the reality of global value chain (GVC) restructuring, the GVC is not only production networks, but also pollution sources that depend on production activities. Based on domestic and foreign markets, this paper proposes the hypothesis that different GVC locations have differential effects on pollution emissions. Using industrial pollution data and two models (a panel fixed-effects model and an instrumental variable two-stage least squares model), we find that increasing exported upstreamness and net upstreamness in GVC by one unit reduces pollution emissions by 3–7%, while increasing imported upstreamness raises pollution emissions by about 5%. We also find that the position in the GVC influences the green production efficiency of enterprises. To mitigate the environmental problems caused by GVC participation, we suggest that external industry regulations and internal technology absorption capacity should be enhanced. This paper provides useful policy implications for adjusting the GVC position of enterprises under the new international division of labor.