Can government procurement drive corporate green technology innovation? Evidence from Chinese listed companies

Liang Tang, Hengkai Zhao, Zhuofan Zhou, Zixi Qian, Shanshan Hou and Bo Liu

Evaluation and Program Planning, 2025, vol. 111, issue C

Abstract: Examining the impact of public procurement mechanism government procurement systems on corporate green technology innovation from a demand-side perspective has become a critical issue for encouraging green innovation in enterprises. Using empirical data from Shanghai and Shenzhen A-share listed companies from 2015 to 2023, this study employs a dual fixed-effect model to test the effects of government purchase behavior on green technology innovation. The findings indicate that government procurement significantly promotes green technology innovation in enterprises. Mechanism analysis reveals that public procurement activity fosters green technology innovation by easing financing constraints, strengthening market competitiveness, improving ESG quality and goodwill image. The heterogeneity analysis indicates that the incentive effect of this system is particularly pronounced among enterprises with weak internal controls, state-owned enterprises, and low-growth enterprises. Further research indicates that executive myopia diminishes the innovation-driven impact of government procurement. This study contributes a novel perspective on how government procurement can enhance enterprises' green technology innovation. Additionally, the findings reveal that executive myopia serves as a negative moderating factor in this process.

Keywords: Government procurement; Green technology innovation; Financing constraints; Internal control; ESG disclosure; Executive myopia (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:epplan:v:111:y:2025:i:c:s014971892500059x

DOI: 10.1016/j.evalprogplan.2025.102592

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