Work

Building Green Production, Forging New Growth: How Green Manufacturing Reshapes Firms’ Green Total Factor Productivity—Insights from Green Factory Certification

Year: 2026

Type: article

Abstract: Green factory certification is an important strategic measure for China to advance the green manufacturing transformation of its manufacturing sector and achieve carbon reduction and efficiency gains in the industrial sector. Using a sample of Chinese A-share listed firms from 2012 to 2024, this study exploits the national green factory certification as a quasi-natural experiment and employs a multi-period difference-in-differences (DID) model to examine the impact of green factory certification on firms’ green total factor productivity (GTFP) and its underlying mechanisms. The results show that, first, green factory certification contributes to the improvement of firms’ GTFP, and this finding remains robust after a series of robustness checks, including propensity score matching, instrumental variable estimation, and placebo tests. Further decomposition reveals that the effect is primarily driven by improvements in green technical efficiency, whereas the effect on green technical progress is not statistically significant. Second, the mechanism analysis reveals that green factory certification enhances firms’ green total factor productivity primarily through three channels: promoting green technological innovation, improving the quality of environmental information disclosure, and mitigating managerial myopia. Third, the heterogeneity analysis shows that the positive effect of green factory certification is more pronounced among manufacturing firms, mature-stage firms, and firms subject to weaker government support for green policies. Building on this analysis, this study further examines green policies across different countries and regions to explore the institutional conditions that enable firms to translate certification requirements into continuous improvement. The findings provide useful insights for improving the evaluation and post-certification management mechanisms of Green Factory Certification and promoting firms’ green manufacturing practices.

Source: Sustainability

DOI: 10.3390/su182111419

Authors: Yuxin Xie, Bingnan Guo

Institution: Jiangsu University of Science and Technology

Language: English

Topic: Environmental Sustainability in Business

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure, Climate action

Open Access status: gold

Estimated APC paid: $2,896