Green fund shareholdings and firms’ dual performance: based on the perspective of institutional logic

Purpose Green funds represent a hybrid approach that integrates both environmental and financial considerations. Firms also strive to balance social benefits with economic performance. This study aims to analyze how green fund shareholdings impact firms’ dual performance and explores the underlying mechanisms and boundary conditions. Design/methodology/approach This study uses a sample of A-share companies listed on China’s exchanges from 2008 to 2022. A fixed effects model is used to assess the dual value of green funds in enhancing both environmental and financial performance while also exploring viable pathways to achieve a “win-win” outcome. Findings Green fund shareholdings significantly enhance both financial and environmental performance, with corporate reputation and corporate transparency acting as mediators. Media oversight and executive compensation positively moderate the relationship between green fund shareholdings and dual performance. In competitive industries, the influence of green fund shareholdings on environmental performance is more pronounced than their effect on financial performance. In the context of politically connected firms, green fund shareholdings have a reduced impact on financial performance, with no significant difference in environmental performance. In addition, the impact of green funds on ownership structure is heterogeneous, promoting dual performance in private firms but not in state-owned enterprises. Originality/value This study enhances the understanding of green funds’ dual investment logic, provides deeper insights into their role in fostering sustainable corporate development and extends the application of institutional logic in enterprise management.