Does government procurement affect corporate carbon emissions? Evidence from China

Supply-driven government intervention policies aid firm sustainability, but do demand-driven government intervention policies impact corporate carbon emissions? This study examines the impact of demand-driven government intervention, specifically government procurement, on corporate carbon emissions using the data of listed firms from 2015 to 2021. The results uncover that government procurement decreases carbon emissions by stimulating demand-driven effects and enhancing green innovation. The enhanced effect is evident with sustainable procurement practices and a favorable institutional environment, particularly in Eastern and Central China. This study contributes to comprehending demand-side environmental governance policies and informs strategies for optimizing carbon emission control policies.