Green Factory Policy and Green-Induced Technological Risk: Navigating Uncertainty in China’s Green Transformation

Given firms’ uncertainty regarding the timing and efficiency of future technological breakthroughs, firms tend to delay investment and demand higher returns to compensate for the associated risks. This concept is defined in the paper as technology-induced risk. From the perspective of green technologies, such risks are more pronounced, and firms are more sensitive to government green industrial policies. This study employs a Difference-in-Differences (DID) model and uses panel data of Chinese A-share listed companies from 2008 to 2023 to evaluate the impact of China’s Green Factory pilot policy on firms’ green-induced technology risk (GITR). The results indicate that the Green Factory pilot policy significantly reduces firms’ GITR. The mechanism analysis suggests that the policy achieves this effect by strengthening government green procurement, promoting substantive green innovation, and facilitating industry–university–research collaboration. Heterogeneity analysis reveals that the policy’s risk-reduction effects are more pronounced among firms with greater government environmental attention, higher levels of human capital, and fewer financing constraints. These findings offer valuable policy implications for both governments and enterprises aiming to foster the healthy development of green technologies and reduce GITR.