The Blessing of Green Label: Investigating the Role of Green Manufacturing Certification in Corporate Green Transformation

ABSTRACT Although green manufacturing certification (GMC) has gained growing attention as a voluntary environmental regulation for green development, empirical evidence on its effectiveness remains scarce. This study identifies the causal effect of the GMC program on corporate green transformation, using panel data of 3441 listed manufacturing companies in China from 2008 to 2023. Employing a staggered difference‐in‐differences approach, the results show that GMC significantly promotes green transformation, with certified firms exhibiting more substantial improvements than their non‐certified peers. We identify three possible mechanisms driving this positive effect: enhanced environmental investment, strengthened green management, and improved technology development. The positive effects are more pronounced in non‐state‐owned enterprises, larger and older firms, and those operating in clean, technology‐intensive industries and regions with weaker environmental constraints. Our findings support the collaborative governance effect of voluntary environmental regulation and provide valuable insights into promoting green development in emerging economies.