Do climate policies lead to outsourcing? Evidence from firm-level imports

Elisa Rottner

No 23-070, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Rising energy prices might lead to adjustments along the supply chain and make firms outsource energy-intensive processes. This could lead to carbon leakage. I provide empirical evidence whether energy price-induced offshoring occurs using firm-level data on energy use, imports, and material purchases. I document that import shares in German industry have increased between 2009 and 2013, and that energy prices correlate positively with imports. Despite this positive correlation, I show in a quasi-experimental setup that a sudden drastic drop in electricity prices has not led firms to significantly reduce their imports or their domestic material purchases relative to an unaffected control group. This holds for very electricityintensive firms; for firms using easily tradable goods; and both for regular importers with a trade network and occasional/non-importers.

Keywords: Offshoring; Energy Prices; Climate Policy; Manufacturing (search for similar items in EconPapers)
JEL-codes: F14 F18 L60 Q41 Q56 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-bec, nep-ene, nep-env, nep-int and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:283593

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