Will global value chain participation reduce environmental emissions? Evidence from Chinese firm-level data

The global value chain (GVC) had brought different pattern to the environment impact of trade. Thus, exploring the effect of participation in GVCs on firms ' environmental performance is of great significance. Using micro data on Chinese industrial firms between 2000 and 2013, we investigate the degree of vertical specialization in their sulfur dioxide (SO 2 ) emission intensity. The results showed that the higher degree of vertical integration in GVCs is conducive to decreasing SO 2 emission intensity through the channels of imported intermediate inputs and enhancement coal -use efficiency. Besides, we construct two different instrument variables to mitigate the endogeneity problem, along with a series of robustness and heterogeneity tests. This study contributes to the literature on the effect of GVC trade on the environment by providing firm -level evidence from China.