The Impact of Government-Led Green Certification on Enterprise Green Transformation—Evidence from Green Factory Recognition

This paper examines the impact of government-led green certification on enterprise green transformation, utilizing data from A-share-listed firms in China and focusing on the Green Factory Certification program launched by the Ministry of Industry and Information Technology in 2016. We find that government-led green certification has a significant environmental incentive effect, with certified green factories significantly accelerating enterprise green transformation compared to non-certified enterprises. These findings provide a strong response to the ongoing debate regarding the environmental performance of green certification policies. Unlike general green certification, government-led green certification incorporates both internal incentives and external monitoring. Green factory certification reduces financing costs and promotes internal green innovation, while also attracting the attention of green investors and media scrutiny, which in turn accelerates enterprise green transformation. Additionally, green factory certification has differential effects on enterprise green transformation. The effect of green factory certification on enterprise green transformation is more pronounced in regions with high public environmental concern, non-heavily polluting industries, non-state-owned enterprises, and large-scale enterprises. This paper broadens the policy pathways for enterprise green transformation from the perspective of government-led green certification, offering valuable insights for promoting such transformations.