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The Impact of Offshoring and Import Competition on Firm-Level Carbon Emissions

Author

Listed:
  • Leisner, Jonathan

    (University of Copenhagen)

  • Munch, Jakob R.

    (University of Copenhagen)

  • Nielsen, August Twile

    (University of Copenhagen)

  • Schaur, Georg

    (University of Tennessee)

Abstract

We use Danish firm-level data to examine the causal link between carbon emissions, offshoring, and import competition. Offshoring reduces firms' emission intensity but increases their production. Import competition reduces firms' production without affecting their emission intensity. For Denmark, these effects imply that observed offshoring trends reduced the overall manufacturing emission intensity while import competition did not. However, despite the emission reducing effects in local manufacturing, offshoring did not affect global emissions. Furthermore, import competition substantially increased global emissions. Therefore, based on offshoring and Chinese import competition, our results suggest that international trade may be bad for the global environment.

Suggested Citation

  • Leisner, Jonathan & Munch, Jakob R. & Nielsen, August Twile & Schaur, Georg, 2023. "The Impact of Offshoring and Import Competition on Firm-Level Carbon Emissions," IZA Discussion Papers 16556, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16556
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    References listed on IDEAS

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    More about this item

    Keywords

    carbon emissions; offshoring; import competition;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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