Waste Consumption Regulation and Sustainable Production Practices: Evidence from China’s Zero-Waste City Pilot

With the growing global emphasis on sustainable manufacturing and environmental compliance, waste consumption regulation has become a key policy instrument for promoting cleaner production practices. This study investigates whether China’s Zero-Waste City Pilot (ZWCP) improves corporate green governance performance (GGP), which reflects firms’ environmental management systems, regulatory compliance, and pollution control practices within production processes. Using micro-level data from A-share listed companies in China spanning 2009 to 2023 and employing a Difference-in-Differences (DID) model, the analysis reveals that ZWCP significantly enhances GGP. The effects are particularly pronounced in private enterprises, heavily polluting industries, and sectors characterized by high competition and regulatory intensity. Mechanism analyses show that ZWCP improves GGP through three key channels: strengthening government support, increasing top executives’ emphasis on environmental protection, and boosting financial institutions’ willingness to provide credit. Additional analysis demonstrates that ZWCP not only promotes improvements in GGP but also significantly drives green innovation and long-term sustainable development. These findings provide micro-level evidence that waste regulation can improve environmental management capacity within corporate production systems and contribute to broader sustainable industrial practices.