Green factory certification and corporate green investment strategy choices in China

Drawing on the exogenous shock of green factory certification, this study examines how green factory certification impacts corporate green investment strategy choices, using a sample of Chinese A-share listed companies from 2010 to 2023. The findings reveal that green factory certification significantly prompts firms to favor internal environmental protection investment over external green mergers and acquisitions (M&A). The potential mechanism is mainly reflected in two aspects: (1) a government-driven mechanism, including increased government subsidies and stricter environmental supervision; and (2) a market-driven mechanism, including reduced financing constraints and heightened media attention. Furthermore, the promotion effect of green factory certification on environmental protection investment is more pronounced in regions with lower marketization levels, in non-heavily polluting enterprises, and enterprises with lower environmental information disclosure quality and higher internal control quality. The promotion effect of green factory certification on corporate environmental protection investment can further promote synergistic enhancement of environmental benefits and economic benefits.