Government Procurement and Corporate Green Innovation: Evidence from Dual Machine Learning

This study employs a dual machine learning model to examine the influence of government procurement on corporate green innovation and its underlying mechanisms. We utilize data on listed Chinese companies from 2015 to 2022. The results show that government procurement significantly elevates corporate green innovation by enhancing expected market returns and alleviating financial constraints. Local governments’ environmental commitment can amplify this effect. The heterogeneity tests indicate that the effect of government procurement is more significant for non-state-owned, small-sized, and clean firms. Local government orders are more effective at motivating green innovation. The integration of demand-and supply side policies synergistically boosts green innovation, particularly for firms with strong innovation capabilities. This study has implications on how to improve the effectiveness and accuracy of green public procurement policies.