Export Demand Shocks and Environmental Performance – Evidence from Finnish Exporters

Terhi Maczulskij () and Outi Jurvanen ()
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Outi Jurvanen: Labour Institute for Economic Research LABORE

No 354, Working Papers from Työn ja talouden tutkimus LABORE, Labour Institute for Economic Research LABORE

Abstract: This paper examines how firms’ environmental performance responds to product- and destination-specific export demand shocks in their export markets. We draw on unique administrative data for Finnish manufacturing firms from 1999 to 2018, matched with national customs records, greenhouse gas emissions, and energy use. The results show that while export demand shocks significantly increase firms’ export volumes and energy consumption, they do not improve overall environmental performance. Specifically, we find no significant effects on carbon intensity or total energy intensity, although fuel intensity declines, particularly in more polluting industries. Heterogeneity and mechanism analyses further reveal that financially weaker firms experience increases in emissions and carbon intensity, suggesting that financial constraints may limit their ability to adopt cleaner technologies. Overall, the findings highlight the critical role of firm-level characteristics in shaping the environmental consequences of trade shocks and suggest that export-promotion policies should account for firms’ financial capacities to support green investments and sustainable outcomes.

Keywords: Emissions; Energy expenditure; Energy intensity; Export demand shock; Firm-level; Carbon intensity (search for similar items in EconPapers)
JEL-codes: D22 F22 O30 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2025-08-25
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