The Impact of Offshoring and Import Competition on Carbon Emissions

Jonathan Leisner, Jakob R. Munch, August Twile Nielsen and Georg Schaur

Journal of the Association of Environmental and Resource Economists, 2026, vol. 13, issue 6, 1503 - 1542

Abstract: We use Danish firm-level data to jointly examine the causal effects of offshoring and Chinese import competition on carbon emissions, output, and the emission intensity of output. Offshoring reduces firms’ emission intensity but also increases their production such that firm-level emissions do not change. Chinese import competition reduces firms’ production and their emission intensity. Next, we apply our firm-level estimates in counterfactual decompositions and in the computation of emission-leakage rates. The resulting evidence shows that offshoring leads to cleaner production in the manufacturing sector while import competition from China mostly leads to more emissions abroad.

Date: 2026
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