Government procurement and corporate investment: Evidence from China's A-share listed companies

Corporate investment serves as a crucial engine driving economic growth, and government procurement, as an important fiscal policy instrument, warrants in-depth investigation regarding its impact on corporate investment behavior. Based on micro-level data from China's A-share listed companies spanning 2015–2022, this empirical analysis demonstrates that government procurement significantly promotes corporate investment by enhancing supply chain stability and alleviating financing constraints. Heterogeneity analysis reveals that this effect is more pronounced among non-state-owned enterprises, firms without political connections, and enterprises operating in highly competitive markets. Further analysis indicates that while government procurement facilitates corporate physical investment, it also guides firms to reduce financial asset investment and enhances both investment efficiency and market value. These findings provide novel evidence for understanding the micro-level transmission mechanisms of government procurement policies, while offering important theoretical foundations and practical guidance for policymakers in optimizing government procurement system design, strengthening supply chain governance, promoting real economy development, and improving macroeconomic regulatory policy frameworks.