Finn Ole Semrau (Kiel Institute)
Industries occupying upstream positions in global value chains emit proportionately more CO2. But firms are heterogeneous even in narrowly defined industries. I empirically investigate if the negative relation between upstreamness and clean production, the latter measured as direct energy consumption and CO2 emissions in absolute and relative terms, holds at the firm-level. Using granular data of Indian manufacturing firms, I confirm the industry pattern in different specifications and the use of a 2-SLS instrumental variable approach - using advertisement expenditures over sales among firms producing a similar main product as an instrument. Notably, exposure to stringent market-related environmental policy in export destination markets negatively moderates the relation between upstreamness and dirty production, linking to the importance of regulation-push, demand-pull and learning-by-exporting for dirty producers in upstream position, characterised by a higher distance to the technology frontier.
Virtuall via Zoom