The Road to Green Development: Vertical Spillovers in the Exports of Environmental Goods by Enterprises

Although the literature has examined the learning effect of firms' exports, few studies have explored whether exports of environmental goods exert a green learning effect on upstream firms in the supply chain in the context of green trade. This paper measures the extent of enterprises' green transformation utilising the text analysis method of natural language processing and conducts an empirical study on the issue using the unique supply chain network data constructed from Chinese customs data and listed companies' supply data and marketing data from 2008 to 2016. Our empirical findings indicate a spillover impact from exports of environmental goods on the green transition of upstream enterprises. This result remains consistent even after applying robustness checks using double/debiased machine learning and instrumental variable techniques. Our mechanism analysis reveals that exports of environmental goods have a positive effect on upstream enterprises' green transition through knowledge and technology spillovers, production‐demand spillovers, and risk‐tolerant spillovers. Our research indicates that green trade benefits both importing and exporting nations, creating a mutually advantageous scenario.