 Service sector liberalization and firms’ carbon emission intensity reduction: Evidence from ChinaJiaxuan Gao, Yanling Wang and Hongjun Xie Journal of Asian Economics, 2025, vol. 99, issue C Abstract: This paper examines the impact of service sector liberalization on downstream manufacturing firms’ carbon emission intensity in China. We quantify China’s service sector liberalization through its policy changes towards foreign direct investment (FDI) and build a composite index of manufacturing firms’ exposure to service sector liberalization as a weighted average of service sectors’ liberalization with their respective input shares. We find that service sector liberalization significantly reduces manufacturing firms’ CO2 emission intensity through inter-industry economic linkages. Our results are robust with two other measures of pollution emission intensities, two alternative measures of service sector liberalization and after correcting endogeneity. We also find that greater productivity enhances the reduction effect. Further, firms’ response is heterogeneous: the impact of service sector liberalization on firms’ CO2 emission intensity reduction is 81 % larger for state-owned enterprises (SOEs) than for non-SOEs; and 105 % larger for large firms than for small- and medium-sized firms. Keywords: Services liberalization; CO2 emission reduction; FDI; Manufacturing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:99:y:2025:i:c:s1049007825000806 DOI: 10.1016/j.asieco.2025.101956 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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