Determinants of firm’s decision to produce green products in Dong Nai province

Abstract

This study analyzes the determinants of firm’s decisions to produce green products in Dong Nai province. We survey 300 firms which are currently doing business in Dong Nai in 2019. A combination of the propensity score matching (PSM) method and the logit regression addresses the problem of heterogeneity between observations in the empirical model. The result implies that a firm that (i) has assigned a leader to take responsibility for green growth; (ii) has an investment in emission treatment equipment; (iii) has procedure guidance for energy saving; and (iv) has an improvement in energy efficiency will have a higher probability to produce at least a green product. Moreover, a penalty for breaching environmental legislation does not encourage firms to produce green products. Several policy implications have emerged on the ground of our empirical findings. First, we propose cooperation and connection between domestic firms and foreign enterprises to inspire the production of green goods and services. Second, some preferential treatments for firms that assign a manager for green development can encourage green production in Dong Nai province. Finally, Dong Nai province shall consider policies supporting firms to mobilize capital to develop technology for green production.