Green public procurement, external pressures and enterprise green transition: Evidence from China

Abstract

Green Public Procurement (GPP) is an essential fiscal policy instrument in China’s environmental governance framework. This paper examines the effect of GPP on the green transition of enterprises by using China’s Green Public Procurement Data from 2015 to 2022. GPP significantly contributes to the green transition. From the perspective of external pressure, GPP enhances both government oversight and social supervision. This positive incentive effect is more significant in public bidding, heavily polluting industries and regions with higher intellectual property protection. Further analysis reveals that GPP exhibits both industry and regional spillover effects on enterprise green transition, though the spillover effects along supply chains are insignificant. Additionally, the study finds evidence of a synergistic effect between GPP and tax incentives in promoting green transition. The research provides new insights for promoting green transition and upgrading enterprises in practice.