The employment effect of Chinese industrial enterprises embedded in environmental cost-adjusted global value chains

Abstract

Abstract The employment effect of enterprises embedded in global value chains has important theoretical value, but existing research has ignored the impact of cross-border pollution transfer on employment under the division of labor system within the value chain. This study constructs a global environmental value chain (GEVC) analysis framework to combine economic and environmental issues and establishes a theoretical model to discuss the impact of the degree of enterprise embeddedness in the GEVC on employment. Using 2000–2006 data from the China Industry Business Performance and China Customs databases, the study finds that an increase in the degree of enterprise embeddedness has a significant inhibitory effect on employment, especially for female laborers, lower-skilled laborers, state-owned enterprises, private enterprises, and enterprises in the eastern region. The research also shows that the cost increase effect enhances the negative effect of increased GEVC embeddedness on employment, while the innovation promotion effect and the foreign direct investment effect serve to mitigate the negative effect. The results provide a reference for developing countries seeking to effectively protect people's livelihood and employment while achieving a leap in the division of labor along the green value chain.

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