Introduction

Since 1980, the global trade landscape has gradually evolved from inter-product to intra-product specialization. As the system of international division of labor deepens and value chains expand, a nation’s export competitiveness depends less on quantitative measures like export volume and more on enterprises’ ability to add value to products and their positioning within the global value chains, an increasingly pivotal role as highlighted by Koopman et al. (2012). Benefiting from its comparative advantage in low factor costs, China has witnessed a surge in its export volumes and has emerged as the “world’s factory,” commanding a significant presence in the global value chains. However, despite these “achievements” in export scale, Chinese manufacturing enterprises continue to grapple with challenges such as size without strength and generally low value-added capabilities. For instance, an exported Chinese iPod priced at $150 generates less than $4 in value added (Linden et al. 2009), whereas the value added from an iPhone export represents only about 1.8% of the device’s total value (Kraemer et al. 2011). While Chinese manufacturing has yet to develop a comprehensive export competitive edge, the long-standing production approach characterized by high input, high consumption, and high pollution has also led to a gradual decline in the domestic natural environment, triggering severe pollution issues and social crises, such as the “2005 Songhua River” contamination, the “2009 Hunan Liuyang cadmium pollution,” and the “2011 Yunnan Qujing chromium slag pollution” incidents. This dire situation compels China to hasten the enforcement of environmental management policies. In practice, the fragmented environmental management system spread across varying levels of government hampers the efficiency of delivering crucial environmental public services. Theoretically, it also impedes the enhancement of domestic manufacturing enterprises’ export competitiveness from an institutional arrangement perspective.

Research on environmental decentralization has unfolded along two principal lines: first, the measurement of environmental decentralization, where most studies have used indirect methods, focusing primarily on legal frameworks, institutional evidence, and practical characteristics (Fredriksson and Svensson, 2003; Lutsey and Sperling, 2008). Second, investigations into the impact of environmental decentralization have examined its economic and social effects, including environmental quality, individual behavior, transboundary spillovers, and government governance (Zhuravskaya, 2000; Faguet, 2001). Another body of literature pertinent to this research is the domestic value-added rate in exports (hereafter referred to as export DVAR). This concept largely stems from outsourcing and division of labor theories (Feenstra and Hanson, 1997; Grossman and Rossi-Hansberg, 2008) and covers two main areas: firstly, the measurement of export DVAR has progressed from early industry-level assessments based on input-output tables (Koopman et al. 2012) to more recent micro-level evaluations utilizing resources such as the China Industrial Enterprise Database and China Customs Database (Upward et al. 2013; Kee and Tang, 2016), with the latter method experiencing continuous refinement and widespread application. Secondly, the influence of export DVAR has been examined from various angles, including environmental regulation (Sun et al. 2023), value-added tax implications (Wu et al. 2021), employment effects (Chen et al. 2012), foreign direct investment impacts (Lu et al. 2022), and industrial agglomeration considerations (Liu et al. 2022).

In summary, while research on environmental decentralization and export DVAR has yielded substantial findings within their respective domains, there remains an academic void concerning the interplay between the two. This study aims to bridge this gap by integrating environmental decentralization and export DVAR within a singular analytical framework, endeavoring to augment the extant literature on three fronts: firstly, by assessing the influence of environmental decentralization on corporate export DVAR; secondly, by disaggregating environmental decentralization into administrative, inspection, and monitoring facets, and delving into the effects of such decentralization on export DVAR through the lens of heterogeneous attributes such as trade patterns, ownership structures, and pollution-intensive industries; thirdly, by refining the construction of enterprise DVAR indicators to surmount the limitations identified in the current body of literature.

CONTINUE READING HERE The impact of environmental decentralization on the export domestic value-added rate of enterprises in China | Humanities and Social Sciences Communications (nature.com)