Global value chain embedding and enterprise energy efficiency: A worldwide firm-level analysis

Global value chain embedding brings growth opportunities for small and medium-sized enterprises, despite their continuously controversial environmental effects. This study examines the impact of global value chain embedding on the energy efficiency of small and medium-sized enterprises using a worldwide firm-level micro data. Results support that global value chain embedding significantly improves enterprise energy efficiency, and this conclusion holds even after self-selection and endogeneity are considered. Global value chain embedding promotes enterprise innovation and labor productivity through market scale and induced learning effects and improves the energy efficiency. Moreover, the evidence only supports the lock-in effect of low value-added, while the lock-in hypothesis of pollution link and foreign technology is invalid. The positive impact of global value chain embedding on energy efficiency is greater for non-high-tech industries, mainly coming from export learning effect and innovation effect. Furthermore, there is no industry heterogeneity in the lock-in effect. Country heterogeneity in the effect of global value chain embedding on energy efficiency characteristics of regional embedding and industrialization, but not to economic development and human capital.