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.