Global supply chains, environmental regulation and green innovation

Led by Aoife Hanley and Katrin Rehdanz

Building on the identification of some social and economic consequences of global supply chains in the project “Modelling economic and social dimensions of global supply chains,” this research project zooms in on one particular aspect, namely, investment in environmental efficiency.

We, firstly, are interested in how participation in global supply chains hampers or facilitates the investment in state-of-the-art production equipment or production processes that are more environmentally efficient. Second, we investigate the effectiveness of incentives such as financial grants, energy taxes, or carbon trading schemes at changing carbon emissions.

In so doing, we aim to shed light on the effectiveness of mechanisms to reduce carbon emissions in firms which operate within countries that participate in global supply chains. These issues are investigated using firm level data for Germany and China.