1198: The Global Sourcing of Green Products (10562)

While international trade in green products is seen as a key factor in facilitating a global transition toward low-carbon economies, our knowledge of firm sourcing strategies for such products is limited. In this paper, we examine how global sourcing strategies for green products are affected by the stringency of country environmental standards and green technological development within a country. Because of the importance of observable and credible sustainable manufacturing practices throughout firm global value chains and unique knowledge requirements for green products, we expect country institutional contexts to have different effects on the global sourcing decisions for green versus non-green products. Our findings using data on U.S. imports for more than 5,000 distinct products over the 2002–2019 period show that green products are more likely to be sourced from countries with higher environmental standards and advanced technology, while non-green product sourcing patterns align with prior research, which emphasizes the appeal of lower environmental standards and cost-efficiency considerations. Overall, this paper identifies an important boundary condition for the pollution haven effect in global sourcing and unlike prior work that argues that higher environmental standards hurt exporters, suggests that such standards benefit green product exporters.

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