Does greenization pay off? Insights from an economic vitality perspective

We investigate the benefits of firms’ greenization from an economic vitality perspective. Using firm-level data from Chinese listed firms during the period 2013–2023, alongside with a theoretical evaluation of greenization as a way of accumulating green knowledge capital, we assess the impact of greenization on economic vitality related metrics and the underlying mechanisms. The findings reveal that: (1) Greenization significantly enhances various economic vitality metrics, primarily through a cost reduction effect and an ESG enhancement effect; (2) Digital transformation and corporate innovation amplify the positive impact of greenization on economic vitality; (3) Heterogeneity analyses indicate that large firms and high-tech firms derive greater benefits from green strategies; (4) A series of robustness tests confirm the consistency of the findings. We provide implications for policymakers and firms to harness greenization as an environmental and economic strategy.