Does the development of the service outsourcing industry enhance green product exports? Quasi-natural experimental evidence from China

Wenjing Liang, Weihua Yu and Xin Yao

Energy Economics, 2025, vol. 149, issue C

Abstract: This paper considers the establishment of service outsourcing demonstration cities in China as a quasi-natural experiment, employing firm data from national tax survey data and Customs Database to investigate the impact of high-end services development in developing countries on the scale of green product exports. The results of the Heckman two-stage model indicate that the development of the service outsourcing industry not only increases the probability of green product exports by manufacturing firms but also significantly enhances the growth of green product exports. This positive effect is primarily attributed to the agglomeration of regional service sectors, enhancements in firms' green innovation capabilities, and upgrades in green product quality. The heterogeneity analysis reveals a stronger impact of service outsourcing demonstration city development in smaller cities, cities with stricter environmental regulations, larger enterprises, and foreign-invested firms. Further analysis using more granular firm-product-level data indicates that the impact of service outsourcing demonstration cities on green product exports varies across different production stages and trade modes. This study provides valuable insights for developing countries to enhance their green international competitiveness given the global division of labor and rising green trade barriers.

Keywords: Service outsourcing; Service sector agglomeration; Green trade; Green innovation; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325005547

DOI: 10.1016/j.eneco.2025.108727

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