Has servitization reduced the embodied carbon emissions of manufacturing export trade? Evidence from 38 countries

Manufacturing servitization is increasingly being proposed as a carbon-reduction solution. However, the impact of rising service inputs on the embodied carbon emissions (ECE) of exports from the manufacturing sector has not been sufficiently investigated. This study departs from existing work by empirically examining the effect of manufacturing servitization on ECE in exports using a multi-way fixed-effect model and three-dimensional panel data from 18 manufacturing industries in 38 countries over the period of 2000-2014. The results indicate that input servitization significantly reduces the carbon emissions embodied in manufacturing export trade. Furthermore, the ECE reduction effect of servitization on developed countries is greater than that of developing countries, while the effect on pollution-intensive industries is greater than that of nonpollution-intensive industries. Using the mediating effect model, the mechanism analysis manifests that input servitization reduces ECE in manufacturing exports primarily through productivity improvement, energy substitution, and global value chain effects. Finally, input servitization and the ECE from manufacturing exports exhibits nonlinear characteristics with changes in technological and economic development levels. Our findings highlight the importance of promoting deeper integration of service elements and manufacturing production processes in achieving the goal of global sustainable development. (c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc- nd/4.0/).