How do global value chain positions affect CO2 emissions in supply chains?

Global value chains (GVCs) influence firms' carbon footprints via intricate production networks. Using a unique multi-source panel dataset of Chinese A-share listed firms and their supply chain partners spanning the period from 2010 to 2016, this study investigates how a firm's position in GVCs affects CO 2 emissions of its suppliers and customers. By combining firm-level GVC position metrics with partner-level CO 2 emissions derived from tax and energy records, the analysis offers novel empirical evidence regarding cross-firm decarbonization spillovers within supply chains. The findings indicate that firms with relatively upstream positions in GVCs are associated with lower CO 2 emissions for both their suppliers and customers, and the effect is more pronounced for suppliers. Mechanism analysis suggests that GVC upgrading influences trade credit and technological diffusion to partners, thereby supporting their partners' emission reduction efforts. These effects are further amplified by the focal firm's engagement in green innovation. Furthermore, these effects exhibit significant heterogeneity across firm ownership, industry competition intensity, processing trade participation, and the scale of partners. These findings provide policy insights for aligning global value chains with sustainable development goals.