Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333981 
Year of Publication: 
2025
Series/Report no.: 
ETLA Working Papers No. 132
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
This paper examines how firms' environmental performance responds to product- and destination-specific export demand shocks in their export markets. We draw on unique administrative data for Finnish manufacturing firms from 1999 to 2018, matched with national customs records, greenhouse gas emissions, and energy use. The results show that while export demand shocks significantly increase firms' export volumes and energy consumption, they do not improve overall environmental performance. Specifically, we find no significant effects on carbon intensity or total energy intensity, although fuel intensity declines, particularly in more polluting industries. Heterogeneity and mechanism analyses further reveal that financially weaker firms experience increases in emissions and carbon intensity, suggesting that financial constraints may limit their ability to adopt cleaner technologies. Overall, the findings highlight the critical role of firm-level characteristics in shaping the environmental consequences of trade shocks and suggest that export-promotion policies should account for firms' financial capacities to support green investments and sustainable outcomes.
Subjects: 
Emissions
Energy expenditure
Energy intensity
Export demand shock
Firm-level
Carbon intensity
JEL: 
D22
F22
O30
Document Type: 
Working Paper

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