Are SME exporters dirtier? A novel input-output analysis distinguishing firm size heterogeneity

Abstract

The thriving development of small and medium sized enterprises (SMEs) and their growing engagement in global markets have exerted significant environmental transformations. This study assesses the environmental effects of China's exports from small, medium, and large enterprises by constructing novel input-output tables that distinguish firm size heterogeneity for 2007, 2012, and 2017. We find that SMEs are responsible for over 60 % of the CO₂ emissions embodied in China's industrial exports. Notably, the emission intensities for exports (EIEs) by large enterprises are on average 8.4 % and 20.8 % lower than those by medium and small enterprises, respectively. The results of structural decomposition analysis highlight several major determinants including a cleaner export structure and a higher proportion of imported intermediate inputs. Our study provides a novel input-output framework applicable to analyzing SME-related issues for more countries and underscores some strategies to enhance the cleaner export performance of SMEs.