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Does ‘going green’ promote global value chain integration?

Published online by Cambridge University Press:  22 September 2025

Mariam Fayek  and
Chahir Zaki Open the ORCID record for Chahir Zaki [Opens in a new window]
Mariam Fayek
Affiliation:
Paris School of Economics, Paris, France
Chahir Zaki*
Affiliation:
Laboratoire d’Economie d’Orléans, University of Orléans, Economic Research Forum, Orléans, France
*
Corresponding author: Chahir Zaki; Email: chahir.zaki@univ-orleans.fr
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Abstract

This study examines the impact of environmentally oriented investments on firms’ integration into global value chains (GVCs). We use firm-level data in 41 countries from the Business Environment and Enterprise Performance Survey dataset and control for selection and endogeneity bias. Our findings reveal that the adoption of environmental protection actions boosts firms’ participation in GVCs. Measures reducing air pollution, followed by waste minimization techniques and energy management tools, yield the highest impact at both margins. Larger firms are more likely to experience a rise in their chances of participating in GVCs compared to their smaller counterparts. At the sectoral level, dirty sectors (such as plastics, construction and chemicals) are less likely to witness the positive impact of environment-friendly measures on GVC integration, given their production techniques that are CO2 and energy intensive. Finally, at the regional level, the effect of such environmental measures is more pronounced for firms located in European Union countries.

Keywords

environmental performancefirmsglobal value chainsinternational tradePorter hypothesis

JEL classification

Q56: Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth F12: Models of Trade with Imperfect Competition and Scale Economies • Fragmentation

Information

Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 23
Copyright
© The Author(s), 2025. Published by Cambridge University Press.

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