The Effect of Government Green Procurement on Green Exports: Evidence From China

ABSTRACT This paper examines whether government green procurement promotes firms' green exports in China. Using firm‐level data, we find that firms included in government green procurement lists export 39% more environmental products on average than other firms. Mechanism analyses suggest that the effect operates through scale expansion, reduced financial constraints, and enhanced green innovation. The effect is more pronounced for foreign‐owned firms, export‐oriented private‐owned firms, large firms, and firms located in financially developed cities. We further show that the increase in green exports is driven primarily by the extensive margin rather than the intensive margin. On average, procurement‐listed firms export 0.8 additional green product varieties and serve 3.1 more destination countries. In addition, government green procurement increases the share of green exports in firms' total exports, suggesting that government green procurement may facilitate firms' green transition. Overall, the findings highlight the role of government green procurement in promoting green trade and shaping firms' environmental upgrading.