Summary :
Abstract
The main objective of this study is to examine the association between environmental regulation, green practices, and GVCs participation, while also assessing the moderating and mediating roles of energy innovation and energy management. By using the EBRD-EIB-WB’s enterprise surveys 2018-2020, we focus on 16894 private firms in 23 Euro-Mediterranean (Euro-Med) countries operating in the manufacturing and service, and retail industries. We employ the GTP-FRM, a two-step Heckman correction and an instrumental variable (IV) approach to account for the endogeneity bias due to reverse causality and the self-selection problem. The main findings show that environmental regulations and energy management practices are more effective than energy innovation in advancing GVCs integration in line with the PH. The driving forces of environmental regulation and energy management are more pronounced for firms that are weakly integrated in GVCs and for EU firms, whereas the positive effects of energy innovation and energy management prevail more for firms in energy-efficient sectors. This could be explained by the fact that firms operating in energy-intensive sectors are highly reliant on the existence of a well-enforced regulatory framework that incentivizes their adoption of green practices, which enhance their integration in value chains. By contrast, firms operating in the energy-efficient section are already adopting pro-active measures and are able to benefit from these green practices to improve their GVCs integration. Also, while there is no evidence for a moderating role of green practices, a good quality energy management can have a full or partial mediating effect for different levels of GVCs integration, and to a lesser extent energy innovation.