Servitization and Environmental Performance: Evidence from Chinese Export Firms

Developing economies generally face a tension between economic growth and environmental sustainability, a conflict particularly pronounced in export-oriented manufacturing. Servitization, as a significant trend in industrial upgrading, holds important theoretical and policy implications for green growth in developing countries due to its environmental impact. Based on heterogeneous firm theory, this paper constructs an analytical framework integrating servitization decisions, pollution emissions, and export characteristics, and proposes a firm-level measurement method for manufacturing input servitization. Utilizing a matched dataset comprising Chinese industrial enterprise pollution data, customs trade data, and input-output tables from 2000 to 2014, this study examines the impact of manufacturing input servitization on the pollution intensity of exporting firms, explores the underlying mechanisms, and investigates heterogeneous effects. The results indicate: First, manufacturing input servitization significantly reduces the pollution intensity of exporting firms, a finding robust to multiple tests. Second, mechanism analysis reveals that servitization primarily drives green transformation through promoting R&D innovation and import expansion. Third, the environmental effects exhibit heterogeneity: foreign service inputs significantly curb pollution, while domestic service inputs show no significant effect; the pollution reduction effect is more pronounced in firms with lower financing constraints. This research provides micro-level evidence and policy insights for developing countries to coordinate growth and environmental protection through servitization transformation.