Global Environmental Value Chain Embeddedness and Enterprise Production Efficiency Improvement

Abstract The rapid development of the labor division system of the global value chain not only improves the technological level of developing countries but also creates opportunities for developed countries that dominate the global value chain to transfer pollution-intensive production links to developing countries. When faced with the pressure of environmental governance, the production efficiency of enterprises in the value chain may change significantly. Therefore, this study establishes a global value chain analysis framework, considering environmental factors, that is, the global environmental value chain (GEVC). It discusses the impact of the embeddedness of enterprises in the GEVC on their production efficiencies. Based on the consolidated data from 2000 to 2006 in the China Industry Business Performance Data and the China customs database, the following conclusion is drawn: The embeddedness of enterprises in the GEVC reduces the production efficiency of enterprises, but the changes of production efficiencies of enterprises with different profitability in the GEVC are significantly different. Specifically, the embeddedness of enterprises with positive earnings in the GEVC can improve production efficiency, while that of enterprises with negative earnings in the GEVC will reduce production efficiency. Furthermore, the learning effect and the competition effect reinforce the positive effect of GEVC on enterprise production efficiency, while the "capture effect" weakens this effect, and the scale effect is insignificant. Moreover, foreign-funded enterprises benefit more from the improvement of production efficiency that resulted from GEVC embeddedness.